Get the App:
“It is sometimes better to study a balance sheet than it is to believe a model”Rudiger Dornbusch, 1980With the Bank of Japan’s recent “shock and awe” decision to double down on quantitative easing (QE), four of the world’s major central banks – the BOJ, the Fed, the Bank of England and the Swiss National Bank – are now “all in” when it comes to ballooning their balance sheets in correlated, if not coordinated, efforts to achieve escape velocity in their economies. These programs are enormous and untested, and they risk serious unintended consequences even if they ultimately succeed in reflating these economies. QE is controversial, but it’s also not well or widely understood – primarily because there is no agreed upon model for how it works. And theoretical economic models themselves can sometimes get in the way, obfuscating instead of illuminating.
Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material contains the opinions of the author but not necessarily those of PIMCO and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO and YOUR GLOBAL INVESTMENT AUTHORITY are trademarks or registered trademarks of Allianz Asset Management of America L.P. and Pacific Investment Management Company LLC, respectively, in the United States and throughout the world. ©2013, PIMCO.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626. ©2013, PIMCO.
Are you sure you would like to leave?
You are currently running an old version of IE, please upgrade for better performance.