Are the Good Times Over?

Rob here with Patriot Privacy and the Self-Reliance Institute.

Toward the end of last year, I shared some very detailed economic and fiscal information from legendary investor Bill Gross with members of the Self-Reliance Institute.

{If you’d like to join the Self-Reliance Institute, see the postscript after my signature line at the end of this post}

Gross has just dished out some additional information in his Investment Outlook that I’d like you to know about.

Now, please understand, I’m not suggesting you follow or invest with Gross or Janus Capital Group – where he works.

I just want you to understand what one of the most knowledgeable money men thinks about where the U.S. economy stands and where it may be headed.


Because, frankly, there are a lot of folks who are singing “Happy Days Are Here Again” and I worry that attitude may be flat out wrong.

So let me share just a few brief tidbits from Gross and, if you like, you can read his entire current Investment Outlook by clicking HERE.

Here are the excerpted tidbits.

Beware the Ides of March, or the Ides of any month in 2015 for that matter. When the year is done, there will be minus signs in front of returns for many asset classes. The good times are over. …

[T]here comes a time when common sense must recognize that the king has no clothes, or at least that he is down to his Fruit of the Loom briefs, when it comes to future expectations for asset returns. Now is that time…Manias can outlast any forecaster because they are driven not only by rational inputs, but by irrational human expressions of fear and greed. Knowing when the “crowd” has had enough is an often frustrating task, and it behooves an individual with a reputation at stake to stand clear. As you know, however, moving out of the way has never been my style so I will stake my claim with as much logic as possible and hope to persuade you to lower expectations for future returns over the next 12 months.”

If real growth in most developed and highly levered economies cannot be normalized with monetary policy at the zero bound, then investors will ultimately seek alternative havens. Not immediately, but at the margin, credit and assets are exchanged for figurative and sometimes literal money in a mattress.”

Comprehending (or proving) this can be as frustrating as understanding the differences between Newtonian and quantum physics and the possibility that the same object can be in two places at the same time. Central banks with their historical models do not yet comprehend the impotence of credit creation on the real economy at the zero bound. Increasingly, however, it is becoming obvious that as yields move closer and closer to zero, credit increasingly behaves like cash and loses its multiplicative power of monetary expansion for which the fractional reserve system was designed.”

Finance – instead of functioning as a building block of the real economy – breaks it down. Investment is discouraged rather than encouraged due to declining ROIs and ROEs. In turn, financial economy asset class structures such as money market funds, banking, insurance, pensions, and even household balance sheets malfunction as the historical returns necessary to justify future liabilities become impossible to attain. Yields for savers become too low to meet liabilities. Both the real and the finance-based economies become threatened with the zero-based, nearly free money available for the taking. It’s as if the rules of finance, like the quantum rules of particles, have reversed or at least negated what we historically believed to be true.”

Debt supercycles in the process of reversal are not favorable events for future investment returns. Father Time in 2015 is not the babe with a top hat in our opening cartoon. He is the grumpy old codger looking forward to his almost inevitable “Ides” sometime during the next 12 months. Be cautious and content with low positive returns in 2015. The time for risk taking has passed.”

OK. That’s just the highlights (or, perhaps, lowlights) of what Gross is warning his clientele about as we move into 2015.

As I told folks in the Self-Reliance Institute a month or so ago, what makes Bill Gross worth following as he steers away from much of the “Happy Days Are Here Again” crowd is that Gross is not some fringe player or gloom and doomer. He’s a mainstream investment advisor and, clearly, he’s worried.

If he’s concerned, I’m concerned. And I do think 2015 may be a year when we get serious about looking at alternative investment ideas.

Of course, I’ll leave it up to you to decide what the future may hold in 2015.

But I’d love to hear your thoughts.

Do you think the good times are ready to roll for everyone? Or, are you concerned that the good times have been limited to insiders on Wall Street and even that bubble may burst in 2015?

Email me your thoughts at [email protected]

Be safe, secure and free!

Rob Douglas – Former Washington DC Private Detective

PS: Have you joined the Self-Reliance Institute?

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Plus, if you join now, you get a free Special Forces Survival Knife and a free month of membership in the Self-Reliance Institute.

Thank you for your time. Be safe, secure and free!
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