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Fed policy isn't stimulus but deleveraging, Brodsky tells King World News
9:35p ET Thursday, September 13, 2012
Dear Friend of GATA and Gold:
If even today's announcement by the Federal Reserve hasn't convinced you of Jim Sinclair's longstanding prediction of "QE to In-fin-i-tee," you may need to hear fund manager Paul Brodsky's interview with King World News. Brodsky says:
"We have been arguing for quite some time now that this really isn't an economic stimulus game that the Fed and other central banks are playing. What they are really trying to do is to de-lever the system. ... We see the $40 billion a month in mortgage-backed securities purchases as being a way to put your thumb in the dyke. We think it's only going to get larger. There is much more of this to come. The frequency of further QE announcements is going to be greater, and it's going to lead to much higher resource and precious metals prices."
An excerpt from the interview is posted at the King World News blog here:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/13_We...
The latest editorial in the New York Sun drives the point home: "Of course we've been easing quantitatively for years now and unemployment is still above 8%, even as an astonishing number of would-be workers drop out of the labor force altogether. Not only is quantitative easing failing to solve the problem it was ostensibly undertaken to solve, but, according to one of our favorite economists, David Malpass, it is actually making things worse: 'In our view Fed bond purchases are weakening the economy's output by misallocating capital -- channeling capital into [mortgage-backed securities], government bonds, gold, and commodities rather than allowing a market-based allocation of capital to job-creating businesses. The stronger the Fed's forward guidance, the more self-fulfilling the economic weakness.'"
The Sun's editorial is headlined "The Missing Element" and it's posted here:
http://www.nysun.com/editorials/the-missing-element/87984/
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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