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Gross: beware the supernova credit explosion
by Atholl Simpson on Feb 01, 2013 at 07:00
2 - Get used to slower real growth: QEs and zero-based interest rates have negative consequences. Move money to currencies and asset markets in countries with less debt and less hyperbolic credit systems. Australia, Brazil, Mexico and Canada are candidates.
3 - Invest in global equities with stable cash flows that should provide historically lower but relatively attractive returns.
4- Transition from financial to real assets if possible at the margin: buy something you can sink your teeth into – gold, other commodities, anything that can’t be reproduced as fast as credit.
5- Be cognizant of property rights and confiscatory policies in all governments.
6 - Appreciate the supernova characterization of our current credit system. At some point it will transition to something else.
To read the full version of Bill Gross' latest investment note click here.
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