Beware of asset bubbles if West implements more QE

ON ASSET ALLOCATION

T.Bailey's Elliot Farley warns further monetary loosening could lead to more liquidity-driven bubbles.

The credit boom that powered Western economies for several decades has turned into a debt burden, which is now a heavy drag. Policymakers have introduced austerity measures to appease their creditors and the outlook for much of the West looks considerably less attractive than that of many of the less debt-burdened nations in the East. Deflation poses a real risk in the West. This has clearly been a concern for central bankers, who have kept monetary policy loose. But should they implement further quantitative easing then we should be keenly aware of the risk of asset bubbles. Let us not ...