GOT (MORE) STIMULUS? BILL GROSS DISCUSSES ECONOMY
March 07, 2011
Got (More) Stimulus? Bill Gross Doesn't Think the Economy
Is "Self-Sustaining"
By Peter Gorenstein
Yahoo Finance
March 8, 2011
…PIMCO's Bill Gross isn't convinced. The so-called Bond King, whose firm manages more than $1.2 trillion in assets, is concerned the economy will stagger when the Fed pulls the plug on its QE2 program at the end of June.
"I suspect that it's not as self-sustaining as they think," he says. "I suspect at we're not standing firmly on our own two legs and that ultimately we're going to continue to need some stimulation from the government."…
However, Gross says the biggest long-term threat to the economy is not one often mentioned: it's America's negative net savings rate of 1-2%. "Basically the U.S. is not saving enough money to replace its own capital from the standpoint of depreciation and potential investment," he says.
If it continues, this is a recipe for disaster, he concludes: "Ultimately a country can't grow that way going forward."
Read full article here.
†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.
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