This transcript is automatically generated
Get the bigger perspective on central banks you heard dance steps that staying in outlook everybody's overplaying -- over thinking what the Fed might do but.
-- somebody who has been watching all Central Bank behavior -- he believes the central banks are not helping but killing the economy.
My next guest says the more they try to help the more they risk ruining the entire system joining us -- -- Fox Business exclusive.
Just in from the -- -- his arms -- -- is Tony Crist sends a Pimco executive vice presidents think so does pretty strong statement that central bankers are killing it can't.
Case that this is strong march he's probably but what we would mean by that is that of course central banks can't ultimately.
Solve the solvency issue only think of Europe for example.
Lots of debt.
But big structural the Mamas and the countries of Italy and Spain -- it can't be solved by liquidity that putting off the day of reckoning you could say.
By giving the politicians time to make change in what I mean.
Think of and in Italy -- -- -- 156 in the world and contract enforcement out of a 183.
Nations ranked by the World Bank can be liquidity can Central Bank money effect that.
Can it -- labor market Richard you rigidity there are kind of affecting Greece.
Tax collection or.
The fact how they have course not now.
I can go on and their head above water it it is and so it is that -- -- actually essential here because what we have is what's called a fractional reserve system little confusing but when you put your money in the bank.
The winds up turning into about eight dollars in launch every dollar you put -- that's a fractional reserve system.
The it what -- privacy is of warehouse system where your dollar gets parked there and maybe somebody else will make the -- but only dollar for dollar so we've got the system.
Very large especially in Europe -- banking system is very large relative to the economy.
And central banks in a period of deleveraging have to fill the gap -- -- if people are selling assets as we now.
And they've got to be first what's happened over many decades dying to know what you thought when he saw the Fed minutes whether you do expect what's called QE3 or quantitative easing more asset purchasing by the Fed to pump up the market the Fed put an exclamation point on its focus first FOMC statement where it made it very clear it was likely to move toward easing in August 1 when it delivered his statement it -- -- -- language that was identical to that language it gave.
September 2010 right before.
The last few week.
And so exited the minutes showed very clinical use where many to describe the numbers of members of boaters are.
In support of action and also said that they would take action fairly soon and west there was substantial.
Improvement in data -- -- and found the senate.
Soon they'll the last opportunity really -- what -- do an intra meeting move which is rare by the way but it has highly they've done -- before.
But is September correct that's the last -- doesn't care.
And Bernanke Fed Chairman and we'll speak in Jackson hold annual Kansas City fed symposium.
Economists love going medical fishing.
Sitting on Friday he'll speak and remodeling.
I'm not going I was someday to go broke below watching closely his speech he'll give him says he has in the past perhaps that's what to what they'll do on September 13.
When fed holds its next meeting is likely they deliver some form of easing action.
Our economy is still growing albeit slowly.
What's working what's not let's start with what is working.
Some pluses include the energy sector there's an engine -- north Dakota's the second largest producing.
Oil states in the country next to Texas takes a -- -- Alaska last year.
Energy at a factory sector is improving car sales over have a better credit it is expanding that's positive in housing bottoming probably -- -- -- point near half point to GDP this year.
We're slightly less and who knows next year now let's go over to sort of the most powerful headwinds what isn't working three that -- -- of a long time that we've had.
Wealth destruction people still down along their homes about four trillion of wealth still lost from the peak now from peak was about 66 trillion.
That suppresses consumption the second things income growth -- is running at up.
Just one point 7% year of the year that's a new normal type figure the old normal was 3% that's why the congress going at two not three.
And finally we've got that have -- fiscal cliff again Europe Europe.
But an organ or credit availability that you mean making it available could you clarify that -- we -- and I said early in the positives is credit -- us banks are lending on the whole but and that.
One break it down we look at that could defense each dot eight report to conceive benefits website on jumping on their right now everyone wants to see -- exciting -- -- -- -- -- -- -- but I waiting with bated breath.
And you see that real estate loans have gone been gone down everything else is up.
That's the big clock if markets credit improved imagine someone from Nevada or Georgia where hasn't hasn't been good.
Can get out of their house -- where they stuck in -- homes with housing hasn't done well to Thomas negative equity can move to North Dakota.
With a loss of jobs and empire -- some cities under 1%.
So more mortgage credit would help there could also help to create more wealth -- people would spend more at Home Depot -- is such.
OK so Tony watches all kinds of fixed income I'm going to put him to the test and asked him.
Which part of the yield curve if you have to be in bonds and we know so many of you -- wanted to going to treasuries just for the safety of it.
Which part of the yield curve seven -- 103015.
Should you be in he'll tell you coming.