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Euro Pacific senior economic consultant John Browne gives his outlook for the economy and the Treasury market.
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83 we heard earlier in the hour from Guggenheim it's Scott minded on what the Fed.
Reaction might be all this.
I think the the likelihood of QE3 increased dramatically today.
So Scott says basically more stimulus is coming from the Fed they're gonna go that's -- QE3 means they're gonna.
It's try to stimulate the economy by bonds so whatever the action -- might be John Brown actually.
Pretty much agrees that the Fed will try senior economic consultant -- Euro Pacific.
Former advisor to British prime minister.
Margaret Thatcher many years ago and he says the QE3 is coming but the problem John is whether or not it will be too late will it work.
Well fasten your identity -- -- markets many policy -- today's problems a -- onto our children and other generations.
But secondly I think it's two related and -- takes between twelve and eighteen months for this money to trickle through unless it's a direct grant of money.
Two individuals when it which of course would be highly inflationary.
Exact or thereabouts of what Margaret Thatcher did.
Moderate that's did almost exact real exact reverse of President Obama festival.
She didn't -- today's problems you face them secondly she replaced -- seven -- with clarity she deregulated.
Savage Nation.
She cut tax enormously the top rate by almost 60% immediate name.
Out of course that unleashed an economic explosion and we were therefore able to repay government debt.
Say it was a highly successful thing by doing the reverse.
Of quantitative easing out of what the president is doing.
Well that she said is not that that particular approach is not gonna happen now whether we debated or not is almost a moot point but the the idea of what does happen and what happens next one of the things people bring up to dad it's notes about it people bring -- up say -- maybe we should start talking about.
Whether we're headed back into recession a global recession -- Scott -- was on early Smart gotten Guggenheim is on all the time very respected investor and he was negative about a lot.
But he submitted them for not headed back into recession simply gas prices have come down that helps out -- other things so yeah.
It's a soft patch it's rough but -- we're not headed back in two recession I know you think.
Differently right.
Yes I think we're still in the same recession gaining pace that we were in the fall that is being camouflaged.
-- Quantitative easing and -- grants of money and borrowing by the government.
And it's created very low interest rates as you said already on the program -- such that the government bond market is not become extremely dangerous.
And those people that a stupid enough to sell goat and -- To get into treasuries.
Are like getting out of the lifeboat back -- the Titanic treasury out there on the decide -- up.
Now got out of Titanic.
-- the Titanic when you're on it looked good.
-- better than the cold water on that for a treasury today looks good but you just wait.
Until interest rates start to rise and see what happens to treasuries it -- very bad that -- in my opinion.
And those people that are correctly hoarding cash -- -- real cash which is go to soma.
Which they should have been days since 2000 -- they would be -- approximate six to 700%.
Depending on the mix between those two metals.
Alright John is always does -- view and -- go ahead net -- that Latin a one last point and we gotta go.
What I think it's heading up again another -- I think it's not just sitting there.
Go to as we if they do quantitative easing which is probably going to be also very -- imaged in Europe right it's going to be a massive inflation -- on the road.
Now aren't in gold is up a lots of its treasury yields are not side John Brown with us thanks a lot and it -- on capitol.
