Janus’ Bill Gross tells Fed to `Get off zero now!’ as economies run on empty

Mainstream America is being cooked slowly alive. . . .

Bloomberg/Mary Childs/9-23-2015

“If zero interest rates become the long-term norm, economic participants will soon run on empty because their investments aren’t producing the gains or cash flow needed to finance past promises in an aging society, he wrote in an investment outlook on Wednesday for Denver-based Janus Capital Group Inc. That’s already beginning to happen in the developed world, where Detroit, Puerto Rico, and, he predicts, soon Chicago, struggle to meet their liabilities.”

MK note:  This is the other side of the interest rate coin.  If the Fed raises rates, all hell will break loose. . . . .And, if the Fed stays in the zero bound, all hell will break loose.   Heads I win; tails you lose. Maybe we should recognize that France, Japan, Detroit, Puerto Rico and Chicago (to name a few) are likely to encounter difficulties no matter what the Fed does simply because from a business point of view governments far and wide have been poorly managed.  As for the private investor, Gross is right when he points to the lack of return as a major problem among ordinary investors.  We are made aware of it every day by prospective investors concerned about where the stock and bond markets might be headed, knowing full well there isn’t much in the way of yield available anywhere.

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