Reuters: Central Banks ‘Running Out of Time’ to Reflate Economies: Bill Gross

The following is an excellent article written by Bill Gross on March 30, 2016 on the Reuters website titled “Central Banks ‘Running Out of Time’ to Reflate Economies: Bill Gross” and I quote:

“Bond manager Bill Gross, who runs the Janus Global Unconstrained Bond Fund, said central banks are “running out of time” to reflate global economies as their aggressive policies including quantitative easing and low, even negative, interest rates are losing their effectiveness.

In his April Investment Outlook, Gross wrote that markets and the capitalistic business models based upon them and priced for them “will begin to go south” if global economies do not produce growth.

Given massive monetary stimulus, Gross said nominal gross domestic product growth rates for the U.S. should be between 4 percent and 5 percent by 2017 while that for the euro zone should be between 2 percent and 3 percent, respectively.

On Monday, the Federal Reserve Bank of Atlanta’s GDPNow model predicted U.S. growth at a 0.6 percent pace in the first quarter, marked down from an earlier estimate of 1.4 percent.

In Japan, nominal GDP should be between 1 percent and 2 percent while China should be between 5 percent and 6 percent by 2017, Gross added.

“Capital gains and the expectations for future gains will become Giant Pandas – very rare and sort of inefficient at reproduction,” Gross said. “I’m saying that developed and emerging economies are flying at stall speed and they’ve got to bump up nominal GDP growth rates or else. Cross your fingers.”

Gross warned against investing in negative-yielding securities.

“The real market and the real economy await a different conclusion as losses from negative rates result in capital losses, not capital gains,” he said. “Investors cannot make money when money yields nothing. Unless… nominal GDP can be raised to levels that allow central banks to normalize short-term interest rates, then south instead of north is the logical direction for markets.”

(Reporting By Jennifer Ablan; Editing by Chizu Nomiyama)”

(The big banking lobbyists are trying to cover up all the corruption caused by deregulation of the big investment banks and Wall Street. And the unregulated investment bankers are still losing ground. that’s why we MUST GET BACK TO an honest banking system like Pres Franklin Roosevelt set up called Glass-Steagall that worked successfully for over 60 years.

LaVern Isely, Progressive, Overtaxed, Independent Middle Class Taxpayer and Public Citizen Member and USAF Veteran

 

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About tim074

I'm a retired dairy farmer that was a member of the National Farmer's Organization (NFO). Before going farming, I spent 4 years in the United States Air Force where I saved up enough money to get my down payment to go farming. I also enjoy writing and reading biographies and I write about myself as well as articles and excerpts I find interesting. I'm specifically interested in finances, particularly in the banking industry because if it wasn't for help from my local Community Bank, I never could have started farming which I was successful at. So, I'm real interested in the Small Business Administration and I know they are the ones creating jobs. I have been a member of Common Cause and am now a member of Public Citizen as well as AARP. I have, in the past, written over 150 articles on the Obama Blog (my.barackobama.com) and I'd like to tie these two sites together. I'm also on Twitter, MySpace and Facebook and find these outlets terrifically interesting particularly what many of these people did concerning the uprising in the Arab world. I believe this is a smaller world than we think it is and my goal is to try to bring people together to live in peace because management needs labor like labor needs management. Up to now, that hasn't been so easy to find.
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