Tags: gross | depression

Gross: Trillions, Not Billions, Needed

By    |   Monday, 09 Feb 2009 09:52 AM

Forget bailout billions, says Pimco bond giant co-CEO Bill Gross. Preventing a “mini-depression” will cost taxpayers trillions.

"This economy needs support from the government, a check from the government in the trillions," Gross told Bloomberg.

"There is a potential catastrophe if the U.S. government continues to focus on billions of dollars."

Gross says the Fed need to buy Treasuries to keep long-term interest rates low while the U.S. increases its debt sales to pay for its huge budget deficit and stimulus programs.

“To the extent that the Chinese and others do not have the necessary funds, someone has to buy them,” Gross says.

“It is incumbent upon the Fed to step in. If they do, that will be a significant day in the bond market and the credit markets.”

General Electric CEO Jeff Immelt, too, warns that the U.S. economy is suffering its steepest downturn since at least the 1970s and could descend into depression.

“Unlike the other downturns that I’ve been a part of, this one is faced with limited liquidity,” Immelt said at a recent conference.

“Once you break through ’74-’75, you don’t stop ’til you get to 1929,” adding that governments are doing all they can to stimulate economic growth and stabilize credit markets — and that the measures being taken should show results by early next year.

“Governments are all in,” Immelt says. “And in my view, government always wins.”

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Forget bailout billions, says Pimco bond giant co-CEO Bill Gross. Preventing a “mini-depression” will cost taxpayers trillions."This economy needs support from the government, a check from the government in the trillions," Gross told Bloomberg. "There is a potential...
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2009-52-09
Monday, 09 Feb 2009 09:52 AM
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