Back to top

Real Time Insight

In his latest Investment outlook, the founder and co-CIO of PIMCO, warned that the US will begin to resemble Greece, before the turn of the next decade if it doesn’t address the fiscal deficit situation.

Fed would print money to pay for the deficiency, inflation would follow and the dollar would inevitably decline. Bonds would be burned to a crisp and stocks would certainly be singed;   only gold and real assets would thrive within the Ring of Fire.”

Gross “Ring of Fire” included Japan, U.K., Spain, Greece and France along with U.S.—the countries which are in the worst public sector deficit/structural fiscal gap situation.

The U.S., in fact, is a serial offender, an addict whose habit extends beyond weed or cocaine and who frequently pleasures itself with budgetary crystal meth.”

He however added that "Armageddon is not around the corner. I don’t believe in the imminent demise of the U.S. economy and its financial markets. But I’m afraid for them."

While most of Gross’s analysis is accurate and his warnings completely make sense, US cannot be compared to Greece and Spain. These countries have uncompetitive economies, very high unemployment rates and most importantly no control over the monetary policy or the currency.

US is still one of the most competitive economies in the world and that is the reason why investors are willing to lend money to the US government at ultra-low interest rates.

Further with the US dollar as a reserve currency and an independent central bank, US is in a much better position to manage its debt. With an economic recovery and prudent fiscal adjustment policies, US can bring down its debt substantially.  

What do you think about his views on the US debt situation?

Just Released: 5 Stocks to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One is a "boring" business delivering blistering growth. Another is a red-hot oil and gas producer set to surge on a drilling breakthrough. Still another, an online payment provider, ignited a 53% sales explosion during the past year.

Close This Panel X

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.80 +7.04%
BANCO DO BR… BDORY 14.74 +5.66%
AIR INDUSTR… AIRI 9.99 +4.15%
EQT MIDSTRE… EQM 98.14 +3.38%
WEATHERFORD… WFT 23.64 +3.10%