Bill Gross On The New Normal

From PIMCO Managing Director Bill Gross’s September Investment Outlook:

It’s time to recognize that things have changed and that they will continue to change for the next — yes, the next 10 years and maybe even the next 20 years. We are heading into what we call the New Normal, which is a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation and control of the economy; in which the consumer stops shopping until he drops and begins, as they do in Japan (to be a little ghoulish), starts saving to the grave.

I could go on, reintroducing the negatives of an aging boomer society not just in the US, but worldwide. Increased health care may be GDP positive, but it’s only a plus from a “broken window” point of view. Far better to have a younger, healthier society than to spend trillions fixing up an aging, increasingly overweight and diabetic one. . . . Our world, and the world’s world, is changing significantly, leading to slower growth accompanied by a redefined public/private partnership.

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