QE: $6 Trillion and Rising, No End in Sight...

Back in April, renowned investor Jim Sinclair said that the U.S. should expect an additional $17 trillion of quantitative easing in the Fed's forecast. Today, Reuters reported on why nearly all other investors across the globe believe further QE will be enacted in the near future...

Since 2008, $6 trillion has been printed as part of the Fed's quantitative easing response to the '08 market collapse and debilitating recession. According to Reuters, that money-printing trend will be here to stay for the next few years as the world's “Big Four” central banks -- the U.S. Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan -- create new money by expanding their balance sheets and purchasing government bonds from their banks. In four years time, the balance sheets of the Big Four have more than tripled – currently setting at $9 trillion without a sustainable recovery in site.

Investors also agree with the notion that more easing is in the works...

Bank of America Merrill Lynch's Gary Baker said, “It is almost as if investors are saying QE will happen no matter what.” In their recent monthly survey of 260 fund managers, approximately three out of four said they expect the ECB to follow-through with another “liquidity operation” no later than this coming October. Roughly 50% believe the Fed “will return to the pumps over the same period.”

But don't expect further easing to perform any miracles. It's going to take a whole lot of time to cure the crisis and repair the debt-damaged economy we're living in. 

From Reuters:

Recapitalizing banks; stabilizing housing and mortgage markets responsible for deteriorating loan quality; further deep integration of euro fiscal links to support the shared currency; and capping government debt piles in the United States, Japan and Britain will - even for optimists - take many years.

…

The concern is that monetary authorities are increasingly acting as government agents responsible as much for stabilizing bond markets and keeping banks clean as for fighting inflation.

The question is not whether central banks can withdraw this money again once broad money growth gains traction - most think that's mechanically easy - it's whether they will be able to resist pressure to carry on underwriting government deficits.

Some economists assert that the “heyday” of independent central banking may be coming to an end amidst modern fiscal policy.