Thursday, October 11, 2012

Beware the "Central Bank Put" Bubble

Good piece (registration required) by Mohamed El-Erian in the FT.

A few choice sentences:
Central banks are neck deep in extreme policy experimentation mode, and getting inadequate support from other government entities. The longer this persists, the higher the risk that policy benefits will be offset by collateral damage and unintended consequences; and the greater the political heat on central banks. If the critical hand-off to fundamentals does not materialise, the reaction of markets will not be pleasant.