Gross on Rising US Credit Level: Lehman Brothers, Anyone?

What’s Eating Bill Gross (And What’s Not) PART 2 OF 6

Gross’s March 2017 Investment Outlook

Billionaire investor Bill Gross shared his views on the rising global credit level, the limitation of having excess credit in the economy, his concern for the return of the investment, and his view on the Trump administration in his March 2017 Investment Outlook.

Gross on US credit

According to Bill Gross, the growing credit level in the global economy (ACWI) (VTI) has reached an alarming level. The global credit level as a percentage of its GDP is rising. Gross said in his investment outlook, “in 2017, the global economy has created more credit relative to GDP than that at the beginning of 2008’s disaster.”

In the United States (QQQ) (SPY) (VFINX), the credit level reached $65 trillion, which is nearly 350% of the country’s GDP (gross domestic product). Gross pointed out that “our highly levered financial system is like a truckload of nitroglycerin on a bumpy road.”

Anyone catching a faint whiff of Lehman?

The rising credit level is a warning sign for the economy, and Gross believes that this situation may trigger a crisis like the 2008 global debt crisis. The excess leverage created a bubble in the economy, and Gross believes that the current situation bears a sharp resemblance to the…

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