Wally M: re:("Bill Gross’s Investment Outlook: Hegemonic Decay")
Gross Outlook :-(
pimcofunds.com
Here's the Newsmax summary of the above linked story at PIMCO. newsmax.com
Thursday, Feb. 7, 2003 4:30 p.m. EST
Bill Gross: U.S. Is Finished
Bill Gross, director of the world's biggest bond fund, is ditching the U.S. bond market for greener pastures.
The Pimco boss opined on his company's Web site: "While the United States rules the waves as well as turf and sky, I'm not so sure that we are, or perhaps will be, the economic powerhouse we once were."
Pacific Investment Management Co., or Pimco, manages somewhere in the neighborhood of $300 billion in assets, and apparently its manager would like to keep a chunk of it out of the U.S.
Gross feels that:
- 9/11 was a "significant catalyst" of change in U.S. foreign policy, which is triggering a decline in our economic influence because: "Foreigners have and will continue to sell the dollar and U.S. investments in fear of guns and butter bills to come."
- President Bush has noted that the war on terrorism will be "a never-ending story, as opposed to a single-shot kill," (as if one can "kill" Islamic extremism with one shot) and that, "If so, investors must know that perpetual containment entails costs - not just monetary, but those involving potential policy reversals that have formed the backbone of America's economic hegemony for nearly seven decades."
In other words, he feels that protecting ourselves from the threat of terror is bad for the U.S. economy, and our standing in the world.
Great, just what we need. Another American intimating to worldwide terrorists that each attack they perpetrate on us will help topple the U.S. economy.
As if that weren't enough, he insinuates that investment in America is not only unlikely, but is a bad idea, if you want to make money.
U.S. "hegemony," as he puts it, is at an end. "The U.S. [economy] ... rests on a fragile foundation built upon consumer spending and trade deficits as opposed to mercantilism and trade surpluses. ... These deficits, coming at a time of American military expansion in pursuit of terrorist containment, threaten to reverse our hegemonic benefits and end our economic domination. Our SUVs, as well as our top cat near-monopoly of the good times are at risk."
By the way, since when did the SUV become a symbol of all that is wrong with the U.S.? With the advent of hydrogen-powered cars, will we hear, "Look out, Saudi Arabia, your armor-plated, diesel Mercedes Benzes are at risk!" We doubt it. Or maybe we should announce, "Watch out, al-Qaeda, your Toyota truck-driving days are numbered!" We won't hold our breath waiting.
But we digress.
So, Gross is correct on this point: We don't manufacture anything here, and we now have a trade deficit. And whose fault is that? More patriotic Americans who have outsourced manufacturing to the cheap labor markets overseas.
Gross continued: "The 'US of A,' it seems, is becoming less wealthy by the minute as foreign investment is being withheld and in some cases redirected to Chinese and other more-attractive ports of call."
One of those "ports of call" might be Mexico.
Said Jim Mulvihill of Black Creek Capital regarding all the money flooding the Mexican real estate markets: "You can still buy quality. In the U.S., all the quality deals are gone," he told the Wall Street Journal.
So, supposedly, according to Gross, the smart money will go to Mexico, whose citizens are climbing over each other to get here, and communist China, the repressive dictatorship that allows everything from execution of female babies to slave labor to mass product piracy, and whose people are literally killing themselves to get here.
Oh, and by the way, we mentioned Pimco, a subsidiary of Allianz AG, is moving a hunk of change out of the U.S. bond market. And where is the money going? To China? No. To Mexico? No.
It's going right into the stagnant bond market of our erstwhile "ally" Germany, coincidentally the home country of Allianz.
This smacks of the post-9/11 actions of George Soros to us.
Isn't it nice to have patriotic Americans controlling your money?
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Now there's an optimist for you <grn>
P |
