Bill Gross, an American investor and philanthropist, has released his investment outlook for February 2017.
Here are a few highlights from Bill Gross’ investment outlook for February 2017.
- Gross says that quantitative easing is creating an unhealthy capitalistic equilibrium that will have to be dealt with someday.
- He says that right now, investors don’t have any choice but to accept quantitative easing.
- Gross notes that a “2.45%, 10-year U.S.Treasury rests at 2.45% because the ECB and BOJ are buying $150 billion a month of their own bonds.”
- The investor says that without quantitative easing “both bond and stock markets worldwide would sink and produce a tantrum of significant proportions.”
- Bill Gross predicts that without quantitative easing from the the ECB and BOJ, that 10-year U.S. Treasuries would rise to 3.5% and the U.S. economy would fall into a recession.
- “A $12 trillion global central bank balance sheet is PERMANENT – and growing at over $1 trillion a year, thanks to the ECB and the BOJ.”
- “But in order to control volatility, and keep a floor under asset prices, central bankers may be trapped in a QE-forever cycle.”
- “An investor must know that it is this money that now keeps the system functioning. Without it, even 0% policy rates are like methadone – cancelling the craving but not overcoming the addiction.”
- “Yields will likely gradually rise (watch 2.60% on the 10-year Treasury), yet they will stay artificially low due to the kindness of foreign central bank quantitative easing policies.”
You can
follow this link to read Bill Gross’ full investment outlook for February 2017 and see what else he has to say about quantitative easing and the danger it presents to the U.S. economy.
