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Witan: why printing even more money can save the world
The US Federal Reserve is likely to embark on more 'quantitative easing' to bolster the global economy, according to Andrew Bell, chief executive of the Witan investment trust.
The US Federal Reserve and other central banks are likely to take more measures such as massive bond purchases to bolster the global recovery, according to Andrew Bell, chief executive of Witan investment trust .
Speaking in a video interview with Citywire, Bell says steps such as a third instalment of quantitative easing – essentially printing money to boost asset prices – by the Fed and other ‘enabling mechanisms’ would be aimed at ensuring liquidity already injected into the US economy had a greater effect.
His comments come as global stock markets climbed on Wednesday, amid hopes that Fed policymakers would take this course of action at their next meeting in September.
Bell explains how officials could prevent more monetary stimulus from stoking speculation in commodities markets, and why it was probably more necessary now than a year ago.
The chief executive also says jointly guaranteed ‘eurobonds’ could be a solution to the eurozone’s debt crisis, although it would probably be some time before European leaders agreed on issuing them.
In addition, he says an Arctic exploration deal between US oil giant ExxonMobil and Russia’s Rosneft is a reminder of BP’s (BP.L) failure to secure a similar such agreement, but will not intensify calls for a breakup of the UK group.
In the past three years, the £1.1 billion investment trust’s net asset value (NAV) has grown 13%, while its share price has risen 12%. The shares trade at a 12.2% discount to the trust’s NAV, slightly higher than its average discount of 11.8%.
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by Gavin Lumsden on Mar 07, 2014 at 18:53