Dan Weil
MoneyNews
August 12, 2010
MoneyNews
August 12, 2010
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| The Federal Reserve’s decision to expand its quantitative easing by purchasing more Treasuries is a dangerous one. | |
The Federal Reserve’s decision to expand its quantitative easing by purchasing more Treasuries is a dangerous one, says Keith McCullough, CEO of research firm Hedgeye.
“That could lead the country to the brink of collapse,” he wrote in a Fortune magazine column.
McCullough agrees with economists Carmen Reinhart and Ken Rogoff, who recently wrote that government debt in excess of 90 percent of GDP pulls down economic growth.
“It’s a point from which it’s almost impossible to return,” McCullough wrote.
Government debt will reach 62 percent of GDP by Sept. 30, the Congressional Budget Office predicts.
“On July 2nd, we cut both our third quarter 2010 and full year 2011 GDP estimates for the U.S. to 1.7 percent,” McCullough says.
