“Okuma Group”: Is quantitative easing destined to make a return to Federal Reserve policy?
Online PR News – 12-July-2010 – – “Okuma Group” has told clients to be mindful of the potential for a return to quantitative easing by the US Federal Reserve.
The firm issued the warning because of what it says are growing signs that the US government may have to resort to additional stimulus measures in another attempt to boost the economy. This, the company reasons, will undoubtedly mean further debt issuance which, at a time of growing investor concerns over the sustainability of sovereign state borrowing, could prove to be too expensive for the government.
Peter Scott, Senior Vice President at “Okuma Group”, suggested that although the US government is currently reaping the benefits of the flight to safety trade and the lower yields payable to investors buying US debt, worries over European debt could soon contaminate US treasury debt and force yields up.
“If yields surge, the US Federal Reserve might simply print the money it needs to buy the government’s debt which will prove highly inflationary and severely compromise the US dollar’s position as the world’s reserve currency”, he concluded.
“Okuma Group” reminded clients that silver and gold still represented the best hedges against profligacy and that the sovereign debt issue could potentially plunge the world back into recession if not correctly handled.