Mar 25, 2011

Barton Biggs says falling house prices will result in QE3

I don't think [the Fed will be forced to raise rates]. I think Bernanke is obsessed with house prices because he knows how important house prices are for the net worth of the average American, and they're crucial. The fact that house prices are still declining has got to be telling him that QE2 is still not doing what he hoped it was going to do.

So, I think if house prices keep falling there's a good probability that he's not going to end QE2 and there may be a QE3.

~Barton Biggs, managing partner, Traxis Partners, Bloomberg News interview, March 24, 2011

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