PIMCO Gross:Most Uncertainty In Global Econ In Decades-FT
06/16/2004
Dow Jones News Services
(Copyright © 2004 Dow Jones & Company, Inc.)
NEW YORK (Dow Jones)--William Gross, portfolio manager at the world's largest bond fund, PIMCO, said the outlook for the global economy is the most uncertain for 20 or 30 years, according to an interview published on the FT.com Web site Wednesday.
Gross said, "Too much debt, geopolitical risk and several bubbles have created a very unstable environment which can turn any minute.
"More than any point in the past 20 or 30 years, there's potential for a reversal," he added in the interview.
Gross also told FT.com, "We have become a levered global economy, specifically in Japan and the U.S.
"With all this consumer debt, business debt, government debt, smaller movements in interest rates have a magnified effect ... a small movement can tip the boat."
In the interview, Gross also warned that the greenback is overvalued against Asian currencies.
"The U.S. dollar is being supported by the kindness of strangers - Japan and China," he was quoted as saying.
"It should be 20% lower than it is. Japan and China will change their stance, we don't know when but we know they will. The dollar isn't overvalued against the euro, but it is against Asian currencies."
