Enter multiple symbols separated by commas

US to Decide on More Money-Printing in 2012: Gartman

The chances of a third round of quantitative easing in the US this year have faded to "bordering on nil", unless jobs figures get much worse, Dennis Gartman, author of The Gartman Letter, told CNBC Thursday.

On Wednesday, minutes from the Federal Open Market Committee September meeting showed that the committee of twelve policymakers leading the Federal Reserve discussed a third round of quantitative easing, and at least two members said the weakening economy might need it.

United States Federal Reserve
Tetra Images | Getty Images
United States Federal Reserve

There were also three members who objected to the Fed taking any new measures at all.

Gartman thinks that a firm decision will be left until next year, when the composition of the committee will change again, unless unemployment in the US, which is currently hovering at around 9 percent, rises to 10 percent. Five of the twelve positions on the committee are rotated between the US's reserve banks annually.

"The Fed might have one more dove next year but we won't know that until the first meeting, in January," said Gartman, who said last month that QE3probably wouldn't happen until October or November.

"There's a great deal of confusion within the Fed and that's when people do nothing and wait. That's what you got out of this last meeting, except for this rather strange Operation Twist, which wasn't unanimously agreed."

Worries About Inflation

There are concerns that further quantitative easing may cause rising inflation, at a time when US consumers are already facing squeezes on their incomes and increased job insecurity.

Despite two rounds of quantitative easing in the US since the credit crisis began, there are still disagreements about whether it has been effective in the real economy.

Many analysts have pointed out that it has so far has not trickled down to tackling unemployment or helping manufacturing.

"The major reason why equity markets in 2009-10 did so well was because of QE," Simon Derrick, Chief Currency Strategist at BNY Mellon, told CNBC.

"I'm not sure if anybody knows whether it helped or not," said Gartman. "There's a dichotomy of opinions within the Fed itself. There's no unanimity over whether it helped."

"The money is created, for want of a better word, it makes its way into the banking system and it just lies there," he added.

"It was hoped when the QE program was undertaken that it will find its way into plant and equipment, but until that happens it isn't making its way into plants or labor, but into stock prices."

Contact Europe News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Europe Video

  • Mobile app success boosts Dominos

    David Wild, CEO of Domino's Pizza Group PLC, talks about getting involved in mobile tech, greater transparency on nutrition and expanding in Europe.

  • Will Russia hold rates on Friday?

    Joseph Dayan, head of markets at BCS Financial Group, explains why he thinks Russia's central bank will "pause and wait" when it comes to cutting interest rates.

  • Yellen has been 'crystal clear' on hikes

    Bob Parker, senior advisor of investment strategy & research at Credit Suisse, lays out expectations on how the U.S. Federal Reserve will hike rates over the next 18 months.