“The strong dollar that used to be touted by Treasury Secretaries in the past 15 or 20 years has some negative consequences,” Gross said in a Bloomberg Radio interview with Tom Keene and Michael McKee.

“Basically these countries are exporting their deflation, and we’re importing their deflation and it focuses and propels deflation forward.”

Gross, 70, became a billionaire and earned his reputation as the mutual fund industry’s bond king by building Pacific Investment Management Co. into a $2 trillion money manager, at its peak, helped by prescient calls on the market.

Gross reiterated that the Fed will start to raise interest rates in June, although rates will be stuck below historical averages for several years.

Gross, who now manages the $1.5 billion Janus Global Unconstrained Fund, said he likes Japanese and European stocks as markets in the U.S. have reached a plateau.

“The attraction is in Japan and euro-land simply because of their QEs, lots of money” he said, referring to programs known as quantitative easing. “That money, as we know, in the United States, propelled equity markets forward and I think euroland is cheap and Japan is cheap on that basis.”

He forecast the rally in those markets will continue for another 12 to 18 months “before the funny money itself runs out.”