Bill Gross: 'Insufficient Consumption And Investment' Is Real Problem

Washington Post:

For a few days there it seemed like President Obama was the master of the bond market. This is a Triple-A nation, he intoned on Monday, and always will be a Triple-A nation no matter what some rating agency says. As if in applause, Treasury bonds rallied furiously in price and yields sunk to cyclical lows. Unfortunately, what they were applauding was the slow growth and perhaps recessionary future that an AA-plus nation faces with too much debt and too little fiscal flexibility to increase demand.

Read the whole story: Washington Post

Comments

[loki]

06:33 PM on 08/13/2011

corporations and businesses [ small , self employed, etc..]and govs, are the only ones who can create consumers. the problem being because the market, and the corporations and many of the small business people insist they deserve millions in profits a year, they refuse to create consumers, IE: hire people who they pay, and in return those people consume. Ivy Greed Capitalist apparently think that consumers are created our of thin air, by gods, or spontaneously appear from rotting meat or something like that, and are blessed with money to spend.

[Reiner-von-Sinn]

06:16 PM on 08/13/2011

Incentivize domestic capital investment - build factories in America

Push the cost of unemployment benefits and WARN act benefits onto corporations outsourcing manufacturing capacity.

New investment, new construction, new jobs increase tax revenues and and better wages increases disposable income.

[loki]

06:35 PM on 08/13/2011

But what about the corporations right to make insane profits and pay CEO's millions for playing golf? They would never allow this to happen.

[loki]

08:41 PM on 08/13/2011

"Incentives­e domestic capital investment - build factories in America"

problem with that is the way the ivy greed capitalist are, they would hire illegal immigrants at very low wages and abuse them , to build the factories. Then they would import H1 visa workers at super low wages and say these are jobs Americans dont want. That is just the way Ivy greed capitalist are trained, educated and think.

[growthedeficit]

04:03 PM on 08/13/2011

We cannot be a society of sweatshop laborers who produce and produce but consume nothing. Bill Gross is finally right (after months of being wrong). We need more consumption. It is the private sector that needs more revenue, not the government. And private sector revenue comes from government deficit spending.

[loki]

06:36 PM on 08/13/2011

I think the capitalist are putting all their faith in China. They think they can sell China their own goods at inflated prices and make billions.

[SILVANUS]

02:01 PM on 08/12/2011

What a statement of the obvious. Any he gets paid for this?

[Reiner-von-Sinn]

06:18 PM on 08/13/2011

Yes because the extreme far Right is ignorant.

[SILVANUS]

07:57 PM on 08/13/2011

yep moreover arrogant about their ignorance

[ApolloniaCreed]

11:31 AM on 08/12/2011

In other economic news we no longer have a gold dollar standard. O_o

[loki]

09:11 PM on 08/13/2011

well duh, thats cause we had no gold left and the rest of the world was about to find out. We had to do something to fool them.

[ApolloniaCreed]

08:40 PM on 08/14/2011

The point of the statement was "well duh" to the article above... and news flash, now country has gold standard anymore.

[Ironquill]

07:43 AM on 08/12/2011

Bill, I have watched you numerous times on CNBC. It takes some guts for anyone in the financial industry to even appear as if they are cutting the President a break. It is so obvious that McConnell is witholding stimulus in order to defeat the President that it is painful to observe. Why don't you put your views forward where it might make some impact, like taking on the knee-jerk Obama haters on the financial news channels?

[BuckarooBanzai]

07:28 AM on 08/12/2011

Bill:
You said:　＂Globalization, where 2 billion new competitive workers from Asia and elsewhere take jobs and paychecks from complacent and ill-trained 40-somethings in developed markets＂
No, globalization does not spring from complacency or lack of training, it springs from the business elite looking for the cheapest possible labor and pocketing the difference. The fact that they also get a huge tax break is just icing on the cake.

[Ironquill]

07:26 AM on 08/12/2011

Bill Gross has stated the obvious. Now go on CNBC and tell it to the three stooges--Santelli, Kiernan and Kudlow.

[Reiner-von-Sinn]

06:20 PM on 08/13/2011

Kudlow's an old nag wearing ideological blinders on the wrong path

[dogofwar]

12:38 AM on 08/12/2011

Wow Bill.....sounds like a DEMAND side problem!

[twoto2]

12:33 AM on 08/12/2011

Ok business's listen up. Financial 101...People WITH decent jobs CAN consume. And I might add that according to the latest new committee report created by some think tank somewhere, the data shows that companies that invest in American jobs(you know, don't outsource) AND actually create something people can touch.... leads to paychecks....which leads to consumerism. Who knew?

[MauricioC]

10:39 PM on 08/11/2011

Well Duh!

Lets take a look at this using an example of recent news.

In the last four years alone, Verizon made more than $19 billion in profits and compensated their top five executives more than a quarter of a billion dollars. But yet the workers have to give up more and more. Tell me-how much money do they need?

I would love to be rich some day. I really would. But not on the backs of others. The top 5 execs splitting 250 million bucks? That money couldn't be used to shore up salaries? Or guarantee benefits they negotiated for? Apparently not. Because while the CEO's pay is nearly 300 times the the salary of an average worker, that average worker's wages have been flat. For a long time.
When money is concentrated at the top, don't expect the middle class to consume to save the economy. Because they can't. They don't have the money.

[loki]

09:13 PM on 08/13/2011

that is Ivy Greed Capitalism that has been quickly destroying America for the last 30 years. Stop them, and we have a chance of survival. Otherwise, how do you feel about living in a cardboard box ?

[Timma]

10:09 PM on 08/13/2011

Excellent post...refanned...

[Peter Combs]

10:36 PM on 08/11/2011

Consume, Invest, consume, invest...sounds like a wheel in a Rats cage...just keep running...

Americans are doing Neither because of the same thing...Lack of Confidence in...Keeping their Jobs, Their Government on many levels, Putting Hard earned money into Corporations who lied..

The Collapse a few years ago, SHOOK small investor confidence to the core, when it was revealed they were ALL lieing to each other, the Big Banks once the Solid Symbol of monetary propriety became little more tha world wide gambling pits backed by the Government..paid with Tax Payer Money. The Government making trade deals that encourage foreign expansion by giving foreigners a market and manufacturing ability. Leaving our borders open allowing an influx of illegal workers to come here, competing for the few jobs their are...and on and on..

Hey Washington...You bet your BUTT , no one is feeling confident..why should they? Hope you're all having a great time while Rome Burns...and you're off playing golf in Spain or Martha's Vineyard perhaps...

[Peter Combs]

10:22 PM on 08/11/2011

This is the fellow who wrote a piece in April saying how much Quanatative Easing has "improved" the job makret...while at the same time he DUMPED all of his US Treasurys (250 Billion Worth) from his own companys porfolio..calling them "worthless..."

The guy is a fraud....he's just watching out for hi 1.24 Trillion Dollar Assett fund , thats getting crushed....

[pat k]

03:47 PM on 08/12/2011

I am glad he is watching out for it. He is keeping my 401k above water.

[VoteThemAllOut]

10:13 PM on 08/11/2011

There is plenty on 'consumption'. Just look at the $53 billion trade imballance noted in another article on this site. How many jobs would be created here is that 'outflow' would be spent on USA made goods?

[blackranger]

08:29 PM on 08/11/2011

There is a solution to this problem, demand that your state keep all its funds in deposits in state banks. Get that money out of the hands of the big (and international) banks who will only put it into the economies of other countries, we need it here right now.