The Gold Report: After months of financial media coverage, investors are suffering from quantitative easing (QE) overload. At this point, what's important for investors to know about QE?
Chris Berry: QE appears to be one of the last arrows in the quiver of central bankers in the U.S., the Eurozone and Japan to try and resuscitate the global economy. Successive rounds of QE have failed to ignite demand, which was the stated purpose. Currently, a great deal of economic data supports a deflationary rather than inflationary view.
The Federal Reserve would love to create inflation, as this is the intended effect of easy money from the QE programs. So far, however, the most prevalent inflation we have is asset price inflation rather than in wage growth. This is not what the Fed wants. We're not seeing the "demand pull" inflation typically found when demand is outpacing supply. The two biggest overhangs in the U.S. economy right now are structurally high unemployment and a cratering velocity of money. Continue reading "Strategies for Profiting from a Distorted Reality: Investing After QE"