- March 1, 2014: Vol. 26, Number 3

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Global perspectives: Some observations from Editorial Advisory Board meetings in the United States, Asia and Europe

by Geoffrey Dohrmann

The first concern for most investors today is capital or, more specifically, too much of it. Central banks around the globe have been vigorously engaged in a multi-year program of quantitative easing, a euphemism for government-sponsored bond-buying programs. Central banks have been printing new money to buy up mostly government or government-backed bonds on the open market. In the United States alone, the Federal Reserve’s activities have driven money supply from $7.6 trillion in 2008 to more than $11.2 trillion at the end of 2013, a 40-plus percent run-up.

The original intent of these bond-buying sprees by central bankers was to support flagging bond markets. The intent also was to keep demand for bonds high relative to supply and, thereby, help keep a lid on long-term interest rates that otherwise might have risen rapidly because of market perception of increased risk in the wake of the global financial crisis.

Central bankers hoped all that money they were printi

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