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Why Central Banks Are Afraid to Let Asset Prices Fall

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    December 11, 2014

    Jim welcomes back Brian Pretti CFA, Managing Editor of ContraryInvestor.com. Brian and Jim cover a range of macroeconomic topics including the recent weakness in the price of oil. They discuss the benefits to the consumer of cheaper gasoline versus the threat to the domestic energy industry, and it’s great run of creating well-paying jobs over the last five years. They also look at the continuing central bank stimulus policies around the globe, from Europe to Japan to China, and how taxes are going up as well. The question of when, or if, the Federal Reserve will ever be able to take away the punch bowl is addressed. Brian points out that central banks are very fearful of falling asset prices, and why quantitative easing policies are likely to continue for the foreseeable future.

    Images: via Flickr (licence attribution)

    About the Author

    Brian Petti – The Contrary Investor

    Brian Pretti is the managing editor of ContraryInvestor.com. Contrary Investor is written, edited and published by a very small group of “real world” institutional buy-side portfolio managers and analysts with, at minimum, 20 years of individual Street experience. Our credentials include CFA, CPA and CFP, as well as the obligatory MBA’s in Finance. We are all either partners or employees of institutions with at least $1 billion under management.

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