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When banks buy new securities, the newly created money flows through the system, raising asset prices and reducing interest rates.
Defending the policies Friday before an audience of central bankers and economists in Frankfurt, Mr. Bernanke said "there is considerable evidence" that securities purchases by the Fed have achieved their goal of raising asset prices.
Instead of tightening, policymakers should work harder to ensure that cheap money translates into new investment rather than higher prices for existing assets.Bubble-wrappedAll monetary loosening bolsters an economy, in part, by raising asset prices.
"We think Kuroda has done a great job in boosting asset prices by raising asset price inflation expectation, but he now has to calm down the sentiment in bond market," Masaaki Kanno, chief economist at JPMorgan Securities Japan, said in a research note.
Like Turner's proposal, quantitative easing involves the central bank's creating large sums of money, but rather than being handed out to people it is used to purchase large quantities of government bonds and other securities, with the goal of raising asset prices, driving down market interest rates, and stimulating spending.
The chaos that has engulfed financial markets, with new rumors of European bank failures, arose as it became apparent that recovery was unlikely until something was done to write down bad debts, whether American mortgages or Greek government loans, or to make them good again by raising asset values and thus increasing the ability to repay.
Similar(46)
"I'm too focused on raising assets," he said.
But in each of the last three calendar years, Mr. Mulholland has beaten the index, and investors have scurried back, raising assets to about $241 million.
Its marketing team has been a force in the world of hedge fund sales focused on raising the firm's profile in the United States, where it has been historically weak raising assets.
Asset purchases, naturally, raise asset prices.
Knock-on purchases would raise asset prices, growth expectations, and the price level.
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