Easing a Done Deal, but No Cure All

Federal Reserve Chairman Ben Bernanke has left little doubt that a third round of massive bond purchases is in the works, yet more liquidity is unlikely to offset the economy's weakness, Pimco Managing Director Neel Kashkari told CNBC on Tuesday.

In the wake of Bernanke's hotly anticipated speech last week at Jackson Hole, Wyo., Kashkari — a former Treasury official who spearheaded the government's multibillion-dollar bailout efforts under former President George W. Bush — said more quantitative easing (learn more) is all but a certainty being priced into risk-sensitive asset markets. (Read More: Bernanke at Jackson Hole: No More Easing, for Now.)

"Chairman Bernanke laid out a compelling case of the Fed’s analysis of why [QE1 and QE2] have worked, why they’re still necessary and why the risks and costs are limited," Kashkari said. "From our perspective QE3 is a virtual certainty but … we don’t think that more liquidty is going to lead to long-term sustainable real economic growth.”

On Friday, the Fed (learn more) chair's remarks sparked a strong rally in stocks and gold, two markets that are among the most sensitive to suggestions of added stimulus from central banks. Kashkari added that expectations of bond buying from the European Central Bank (learn more) — which is trying to firewall the euro zone from the effects of its debt crisis — is also a factor behind surging asset prices. (Read More: Central Bankers Eye ‘Drug’ That Is Bond Buying.)

“When you have global central banks creating this much paper money going into the system, it has to go somewhere," Kashkari said. He also warned investors against a sense of complacency that the Fed and European Central Bank (learn more) would save the day.

The U.S. presidential elections, the so-called fiscal cliff, and global central bank actions are all looming event risks "coming to a head in the next few months.