“Analysis: Fed’s QE2 Raises Alarm of Commodity Bubble”
“A commodities buying spree spurred by U.S. quantitative easing has raised alarm of an inflationary bubble reminiscent of 2008 when oil and other industrial raw materials struck all-time highs before the crash.
But the Reuters-Jefferies CRB index .CRB, a global commodities benchmark, has since hit a two-year high as part of an 18 percent gain since the start of September when markets began to anticipate U.S. action.
Federal Reserve Chairman Ben Bernanke has argued the likelihood of deflation is greater than of inflation.
Inside and outside the U.S. central bank, critics have said QE2 — so called because this is the second round of quantitative easing — could lead to high inflation and low interest rates would create asset bubbles as investors sought returns by piling into riskier asset classes.” Read more.
“Analysis: Fed’s QE2 Raises Alarm of Commodity Bubble”
Barbara Lewis and Nick Trevethan
Reuters, November 5, 2010.
Image by Salvatore Vuono / FreeDigitalPhotos.net.
