“You’ve inherited an asset-based economy whose well has been pumped nearly dry with lower and lower interest rates and lender of last resort liquidity provisions,” he wrote. “Your administration will produce this nation’s first trillion dollar deficit.” Foreign central banks and private investors may not continue to buy Treasuries at the same rate as in previous years a trend that has kept Treasury yields lower than they would otherwise be. Absent these low interest rates to aid the economy, “what you need now is fiscal spending and lots of it,” Gross wrote.
By January, U.S. home prices will have fallen nearly another 10 percent, “and our Japanese-style property deflation will be in full stride,” Gross wrote.”
By January, U.S. home prices will have fallen nearly another 10 percent, “and our Japanese-style property deflation will be in full stride,” Gross wrote.”
