CEO: Fed's Love of Quantitative Easing is 'Heroin Addiction'

November 5, 2013 - 4:34 PM
Investment executive demands an end to Fed stimulus, but says rehab won't come soon.

"They should knock this off. This is bad. This is a heroin addiction. It's gonna get - the more you get on it, the worse it's gonna get," Barry Sternlicht, CEO of Starwood Capital Group, said on Nov. 5's CNBC "Squawk Box." Sternlicht was criticizing the controversial fed stimulus known as "quantitative easing."

Under quantitative easing, the Federal Reserve buys $85 billion in bonds per month, injecting these billions into the economy.

Sternlicht reiterated later in the segment: "It's not good. This is not good, and - and this is not smart."

Many economists and bankers fear that quantitative easing could result in runaway inflation, which could have a disastrous impact on the economy. John Tamny of Forbes Magazine wrote on Nov. 5 that "Wall Street is healthiest when the dollar is stable," and argued that quantitative easing is detrimental to that stability.

But, quantitative easing is unlikely to go away anytime soon. Peter Schiff, famed economist and CEO of Euro Pacific Capital, wrote for CNBC on Nov. 4 that "the economy is still fundamentally addicted to stimulus." He even argued that the Fed would continue quantitative easing through 2014.

Even Sternlicht said that his plea that the Fed "could at least match the deficit that they're tapering" was futile. "They're not, they're actually printing more money than the deficit is this year," he said.