Pensions

Bill Gross: About Helicopter Money

Bill Gross: About Helicopter Money

Technology and mass robotization are probably the single biggest threats to our jobs. Jobs of both the blue and white collars are gradually being replaced by robots that are much more cost efficient and productive. Plus, robots have no want for minimum wages, or hold strikes in protest for what is now a huge skill deficiency in the labor force across the world.

So will politicians and central planners dabble with the risk of upsetting the status quo for a potential change in direction? Unlikely.

Rather, Janus Capital's Bill Gross believes central planners will stick to what they have always been best at: Printing money (QE), lowering interest rates or bringing them sub zero as we've seen recently, and fiscally stimulating economies with debt funded programs thereby creating a false impression of prosperity when there isn't.

Bill Gross: QE Has Failed Terribly

Bill Gross: QE Has Failed Terribly

Central banks aren't stupid, they're just stubborn. The unintended consequences, a palpable word for not heeding the lessons of history, of zero bound rates have never been further reaching.

Businesses lose foresight they used to have. Savers and pensions suffer the most because savings cannot earn a high enough return to justify the value of time and opportunity costs. It's all about the yield curve, which has never been as flat as it is today.

Things have gotten so out of whack that even Gross himself openly admits that the 'necessary' changes will most probably not be effected. Entire financial systems have been built on this new paradigm.

Unfortunately for the real economy, this new paradigm has hindered long term economic growth and stability. Will anything change? Perhaps not.