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Finance expert warns Fed is pushing U.S. to collapse bigger than 2008

The Federal Reserve’s easy money policies have given too many U.S. investors false hope about the state of the economy. But it won’t last much longer. Buying high and hoping for a good outcome, says one economic expert, is going to ruin thousands of investors and create a massive economic recession.

Via MarketWatch:

Bill Gross, portfolio manager of the Janus Global Unconstrained Bond Fund, on Wednesday warned that the financial markets are at their most vulnerable since the 2008 financial crisis and investors are paying too high of a price for the risks that they are taking.

“Instead of buying low and selling high, you’re buying high and crossing your fingers,” said the bond guru, speaking at the Bloomberg Invest New York conference.

He blamed central banks’ loose monetary policies for inflating asset prices without tangible economic growth where individual savers and banks end up paying the penalty.

“Money is being pumped out into the system and money that is yielding less than nothing seeks a haven not only in bonds that are under-yielding but in stocks that are overpriced,” said Gross in a separate interview with Bloomberg TV.

The fixed-income legend has been a harsh and consistent critic of central bankers who have resorted to flooding the global markets with easy money to prop up the economy. In recent years, Gross has periodically called for a financial meltdown, predicting that the excesses of the Federal Reserve and its peers will soon catch up with stocks and bonds.

As of yet, his prophecy of imminent market doom has not panned out as stocks remain in rally mode while bonds, which theoretically suffer when investors are bullish on equities, are showing few signs of a bear market.


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