Paul B. Farrell: Fed’s QE2 is doomed to fail

[marmar]

By Paul B. Farrell, MarketWatch


SAN LUIS OBISPO, Calif. (MarketWatch) — Warning, Fed Chairman Ben Bernanke’s foolish gamble to stimulate the economy will backfire, triggering a new double-dip recession. Bernanke is “medding” too much in the economy, say Marc Faber, Bill Gross, Jeremy Grantham, Joseph Stiglitz and others.

The Fed is making the same kind of mistakes Japan made that resulted in its 20-year recession. The Washington Post says Larry Mayer, a former Fed governor, estimates that to work it would take QE2 bond purchases of “more than $5 trillion …10 times what analysts are expecting.”

Bernanke’s plan is designed to fail. And, unfortunately, that will make life far more dangerous for American investors, consumers, taxpayers and voters.

“I’m ultrabearish on everything, but I believe you’ll be better off owning shares than government bonds,” said Hong Kong economist Marc Faber at a recent forum in Seoul. He sees a repeat of dot-com-bubble insanity today. Faber publishes the Gloom, Boom & Doom Report.

And Warren Buffett agrees, warning that anyone buying bonds now is “making a mistake.” Don’t buy. Sell. ..........(more)

The complete piece is at: http://www.marketwatch.com/story/sell-bonds-now-feds-qe2-is-doomed-to-fail-2010-11-02

[BootinUp]

1. Gross and some of the others are just upset

because it doesn't favor their current portfolio positions or they are lacking in seeing the whole complicated picture. I admit that I draw heavily on Krugman for my views.