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Gross to Bernanke: QE3 Will Cause Banks to Lend Less
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
wealthwire.com / By Brittany Stepniak / Thursday, September 6th, 2012
The Federal Reserve continues to disappoint. Not only were there last two rounds of quantitative easing little more than useless, but they’re planning a third round to go into effect sometime this fall. Jim Rogers believes QE3 is already underway, but the Fed’s staying quiet about their activity… for now.
The Federal Reserve’s FOMC is scheduled to conclude its meeting on September 13. The country is waiting on pins-and-needles to hear what the Fed’s decision will officially be…
Investors are riled up and scarcely anyone is excited about the coming QE3.
Now bond-guru and co-founder of asset management firm Pimco, and manager of the largest mutual fund in the world Bill Gross argues that the Fed’s latest QE efforts and bond buying programs will make borrowing so cheap that banks may not lend as readily anymore.
You see, banks get a pretty sizable cash stockpile when they lend out from depositors, to which they pay zero or little interest. Additionally, it’s common for most lenders to sell mortgages to Fannie Mae or Freddie Mac, which can borrow at even lower rates and profit from enforcing a fee.
Thanks to BrotherJohnF
2012-09-06 12:55:29
Source: http://silveristhenew.com/2012/09/06/gross-to-bernanke-qe3-will-cause-banks-to-lend-less/
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