Manager Of World’s Largest Bond Fund Says Fed Should Print More Money


Gross mentions the St. Louis Fed president comment and agrees that the Fed should buy more treasuries.

July 29 (Bloomberg) — Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., talks the possible need for more, non-fiscal, economic stimulus. Gross also discusses the performance of Pimco’s bond fund and Federal Reserve monetary policy. He speaks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.”

Bloomberg

“Non-fiscal, economic stimulus” means monetary stimulus which means the Fed should print money to buy assets. As you listen to the interview, you may notice his Keynesian mindset with word choices like “animal spirits” and his focus on stimulating demand. However, supply creates its own demand (Say’s Law) meaning the only way to satisfy ‘demand’ for something is to offer something for trade in return (which means one must produce something first (supply)). Schiff remarks all the time that ‘demand’ is practically infinite. People always want more consumer goods that they deem to alleviate uneasiness in their life. How many people would like better food, drive a nicer car, have a nicer house, clothes… have their own jet, etc.? The demand is there for these things… but what prevents people from satiating this demand is that they haven’t produced a commensurate amount of goods/services to trade for what they want. Printing money and giving it to everyone doesn’t increase demand, it will just raise prices.

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