Bill Gross, one of the most astute bond investors, around says Obama as president could result in a federal budget deficit far higher than anything that has ever been seen before.
Bill Gross, manager of the world’s biggest bond fund, said a Barack Obama administration may produce the first $1 trillion deficit and intermediate-and long- term bond yields have already reached cyclical lows.
Higher taxes for hedge-fund managers and oil companies will not cover anticipated Obama tax cuts for the poor and middle- class, universal health care and aid to the depressed residential real estate market, said Gross, a long-time Republican.
“This economy will need a jolt of $500 billion or so of government spending real quick,” Gross, co-chief investment officer of Newport Beach, California-based Pimco, said in an open letter to Obama, the likely Democratic presidential nominee, published on the company’s Web site today.
Makes good sense, since Obama has proposed about a trillion dollars worth of spending programs.
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