Bill Gross Says Central Banks Have Inflated Asset Prices

Central banks are stuck in a permanent cycle of low interest rates and money printing that bond guru Bill Gross said eventually will blow up.

In his monthly newsletter for clients, the Janus Capital portfolio manager again railed against policies from the Federal Reserve and its counterparts around the world that he said have inflated asset prices but have done little to boost economic growth.

He likened the easy-money efforts to “financial methadone,” in which the Fed’s withdrawal of stimulus has been met with increased efforts from the European Central Bank, the Bank of Japan and elsewhere.

The global central bank balance sheet has surpassed $12 trillion, Gross said. At the same time, Fitch Ratings recently reported that global sovereign debt with negative yields still surpasses $9 trillion.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza