Re: Bill Gross says Bernanke is in a fog
The most consequential part of the interview is the last minute, and I almost missed it because I found the early and middle portions tedious and repetitive.
Gross thinks the stubbornly high US unemployment rate is more “structural” than cyclical. He cites three main headwinds:
• Increasing globalization is lowering wage rates. (And, as a side effect that Gross didn't mention, it is increasing corporate profits.)
• Populations in many countries are aging. (The elderly consume less than young and middle-aged adults, so an aging population lowers demand, all else being equal.)
• Technology is reducing employment by eliminating low-skill jobs faster than it is creating high-skill jobs.
If Gross doesn’t actually believe all this and is merely talking book as a bond investor, he must be a very good actor.
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