just a thought, where does the government do its financing? Through bonds etc., I believe? So whom would bet a significant amount of cash from the government, people like Gross I suspect. So there's more than a bit of self serving interest here.
>He's got a podcast which is about the best consolidated source of >investment advice I've ever found (I've never lost money even for a >day using his advice). >----------------------- >Bill Gross' $500 Billion Solution >Carl Gutierrez, 06.30.08, 11:39 PM ET > >It must be galling on many levels for the Grand Old Party that >registered Republican and billionaire bond-guru Bill Gross is advising >"President Obama" to add $500 billion in spending to the federal >budget. > >Labeling himself as an "ordinary citizen" in a colorful open letter to >the presumptive Democratic presidential nominee, the far-from-ordinary >head of PIMCO thinks additional government spending of about $500 >billion--and the first-ever $1 trillion deficit that would come with >it--is the only thing Barack Obama can do to keep the U.S. economy >afloat. > >In a letter posted on PIMCO's Web site, Gross reminded Obama that >gross private domestic investment has declined by $200 billion since >its peak in late-2006. Meanwhile, thanks to higher unemployment and >energy costs, domestic consumption will soon be $300 billion less than >it should be for the U.S. to return to historical economic growth >rates. Taken together, "consumption" and "investment" renders the "old >C + I + G formula" $500 billion short, leaving G--the government--to >pick up the slack. > >Warning of the potential dark alternatives (think Japan), Gross >believes his $500 billion suggestion can to work. "Strong global >growth spearheaded by developing countries and accompanied by >significant commodity inflation should provide a firm background for >stimulative U.S. monetary and fiscal policies during your first >administration," Gross told Obama in his July 2008 Investment Outlook. > >Concurrently, current negative real interest rates, along with the >"innovative liquidity provisions" taken by Ben Bernanke's Federal >Reserve, should promote reflation, as opposed to deflation, making a >trillion dollars of government deficit spending a potent medicine, >Gross said. > >However, the bond king told the "president" that the stimulative >spending's inflationary effects will not be felt fully during the peak >deficit period. "Rather," Gross said, "inflation will accelerate >during the subsequent recovery as the government bonds acquired during >the recession are transformed once again into risk bearing assets and >high levels of investment." > >To Gross, the scenario suggests that medium- and long-term yields on >government bonds have already bottomed and will gradually rise >throughout Obama's first, and perhaps second administration. > >"Your term," Gross wryly quipped, "will not go down in history as >investor friendly." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;203748912;27390454;j Archive: http://www.houseoffusion.com/groups/CF-Community/message.cfm/messageid:263229 Subscription: http://www.houseoffusion.com/groups/CF-Community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
