Morgan Stanley`s Stephen Roach, urged the policy makers in the US to start exiting emergency stimulus. Roach sees the risk of a new investment bubble:
“There is never an easy time to do it. The longer they wait, the greater the chance they sow the seeds for the next bubble. So I’m in favor of an early exit strategy.
We’ve seen the most extraordinary monetary stimulus on the record in the 15, 16 months post-Lehman Brothers. We’ll have to see the most extraordinary withdrawal of stimulus on record if this recovery is as strong as Bernanke and markets think it is, the time to exit is now.” in Bloomberg.com
Roach also criticized Ben Bernanke for assuming that monetary policy did not play a role in the subprime crisis:
“I think we need to take a very careful look at monetary policy and central bankers who do not believe that interest rates played a role in this crisis. I think that view is dead wrong.”
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