Bill Gross makes an argument that money should flow to Germany due to significant deficit pressure and quantitative easing. Interestingly, he's not a big fan of our elected representatives, basically accusing them of being easily bought by lobbyists. He puts it in terms of ROI, $500 million spent on health care lobbying for a $50-$100 billion annual return.
My main question on the "go to Germany" strategy is, even though the German fiscal situation looks fantastic--and let's face it, when doesn't it-- what happens to your real return if you get a sharp drop in the Euro?
This could unfold quite simply with debt problems in Greece, Spain or elsewhere putting pressure on the Euro. Even if US deficits stay at 8-10% of GDP for one more year, the Euro would likely suffer severely.
More here.
