Via CNBC
All the liquidity hasn't been going into the real economy; instead it's going into asset reflation, he added.
"Soon enough asset reflation can become asset inflation, asset inflation can become asset frothiness and eventually you have asset and credit bubbles."
Therefore, he thinks valuations and the length of the Fed's exit from the market need to be watched.
"My worry is the real economy justifies a slow exit—low inflation, still low growth, unemployment is still high—but then all this liquidity is going to go to asset inflation and eventually in frothiness and financial bubbles."
All the liquidity hasn't been going into the real economy; instead it's going into asset reflation, he added.
"Soon enough asset reflation can become asset inflation, asset inflation can become asset frothiness and eventually you have asset and credit bubbles."
Therefore, he thinks valuations and the length of the Fed's exit from the market need to be watched.
"My worry is the real economy justifies a slow exit—low inflation, still low growth, unemployment is still high—but then all this liquidity is going to go to asset inflation and eventually in frothiness and financial bubbles."
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