The United States must reclaim its position as a manufacturer of goods that meet global demand in order to restore the country's economic health, says Bill Gross, co-chief investment officer of Pimco.
Both politicians and voters are failing to address the key problems facing the U.S. economy, said Gross, who oversees more than $1 trillion in assets at Pimco, operator of the world's biggest bond fund.
"Politicians and respective electorates focus on taxes or healthcare when the ultimate demon is a lack of global demand and the international competitiveness to thrive," Gross said in his monthly investment outlook note to clients, which was posted on Pimco's website.
Gross offered simple advice to restore the U.S. economy's long-term health: "Stop making paper and start making things," by replacing U.S. government bonds with American cars, steel, iPads, airplanes, or corn — "whatever the world wants that we can make better and/or cheaper."
Economies around the world are competing for a share of a "diminishing growth pie," said Gross, who added that the policies of developing nations "are oriented toward export to debt-laden developed nations instead of internal consumption." (more)
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