Central banks have turned financial markets into a “Vegas casino”

57f3b8a1c3618852418b464b

https://www.rt.com/business/361575-central-banks-vegas-casino/

Unprecedented central bank monetary policies such as negative or zero rates have turned financial markets into a casino, said bond investor Bill Gross of Janus Capital. He recommends investors switch to gold and Bitcoin, if they want to keep their money.

“Our financial markets have become a Vegas/Macau/Monte Carlo casino, wagering that an unlimited supply of credit generated by central banks can successfully reflate global economies and reinvigorate nominal GDP growth to lower but acceptable norms in today’s highly levered world,” Gross said in his ‘Doubling Down’ investment outlook.

The investor oversees $1.5 billion at Janus Capital explains gold and Bitcoin are safe havens for those who want to preserve their cash.

“At some point investors – leery and indeed weary of receiving negative or near zero returns on their money, may at the margin desert the standard financial complex, for higher returning or better yet, less risky alternatives,” Gross said.

Negative or zero rates are dangerous in case of recession and also destroy the basic foundations of capitalism, Gross said.

“A commonsensical observation made by yours truly and increasing numbers of economists, Fed members, and corporate CEOs (Jamie Dimon amongst them) would be that low/negative yields erode and in some cases destroy historical business models which foster savings/investment and ultimately economic growth,” he said.

This isn’t the first time Gross has attacked central banks’ monetary policies. In June, Janus Capital estimated that global yields are the lowest in 500 years, and the total amount of negative rate bonds is $10 trillion. Gross called it a “supernova that will explode one day.”

https://en.wikipedia.org/wiki/Bill_Gross

Gross graduated from Duke University in 1966 as an Angier B. Duke Scholar, and with a degree in psychology. At Duke, he joined Phi Kappa Psi. He then served in the Navy and earned an MBA from the UCLA Anderson School of Management in 1971. Gross briefly played blackjack professionally in Las Vegas, Nevada, and has said that he applies many of his gambling methods for spreading risk and calculating odds to his investment decisions.

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Our financial markets have become a Vegas/Macau/Monte Carlo casino, wagering that an unlimited supply of credit generated by central banks can successfully reflate global economies and reinvigorate nominal GDP growth to lower but acceptable norms in today’s highly levered world,

gross eh?

and whats his advice?

“global yields are the lowest in 500 years, and the total amount of negative rate bonds is $10 trillion. Gross called it a “supernova that will explode one day.”

put your money here he says:

“He recommends investors switch to gold and Bitcoin, if they want to keep their money.”

bitcoin?

401

~ by seeker401 on October 10, 2016.

One Response to “Central banks have turned financial markets into a “Vegas casino””

  1. Reblogged this on World Peace Forum.

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