Bill Gross says QE1 and QE2 are destroying credit expansion

Is the so-called cure causing more damage than the disease? Bill Gross explains his FT opinion piece on Bloomberg and lays out how QE1 and QE2 are actually damaging credit creation:

‘There is no doubt that by purchasing longer-dated Treasuries that they would probably lower the cost of credit. My argument is the creation of it would it be destroyed and has been destroyed over the past several years during QE1 and QE2.

‘To bring the point specifically to what occurred the past several months with a two-year Treasury extension and the conditional freezing of interest rates at 25 basis points for two years, you have that basically flat yield curve destroys systemic leverage…Credit is basically destroyed in the process of lowering and freezing interest rates.’