More advice from Pimco's Bill Gross: Invest in Canadian, Mexican, Brazilian bonds - anything but...


More advice from Pimco's Bill Gross: Invest in Canadian, Mexican, Brazilian bonds - anything but dollar-based debt: "It’s a critical strategy going forward to get out of the dollar and into some currency that holds its value."
Comments (8)
  • Ava Et
    , contributor
    Comments (8) | Send Message
     
    Here is a man who is letting his emotions cloud his judgement. There are good reasons not to hold US Government debt, but to advise jumping into the frothy world of Mexico and Brazil is not an obvious choice. Don't trust any one who uses words like "critical" - they don't have your interests in mind.
    31 Dec 2010, 01:47 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4297) | Send Message
     
    If you are looking for a currency that holds its value, think about gold.
    31 Dec 2010, 01:50 PM Reply Like
  • wyostocks
    , contributor
    Comments (9115) | Send Message
     
    I see Brazil, what with all the oil and the upcoming olympics; but Mexico, Please! Maybe its a pump and dump.
    31 Dec 2010, 01:52 PM Reply Like
  • ain't no fortunate son
    , contributor
    Comments (1607) | Send Message
     
    Bill, have you been having secret meetings with Larry Meyers and Brian Sack again?

     

    Naughty naughty, trading on inside information, tsk tsk.
    31 Dec 2010, 01:55 PM Reply Like
  • kmi
    , contributor
    Comments (4682) | Send Message
     
    Hedging against dollar is good strategy, but I'd look at economies more likely to hold strong in the event US encounters turbulence, Mexico is too closely linked to the US and I wouldn't do Brazil/Canada for a dozen reasons, but I do like S Korea and India...
    31 Dec 2010, 02:14 PM Reply Like
  • bob adamson
    , contributor
    Comments (4560) | Send Message
     
    I’m a Canadian who has confidence that Canada will continue to do relatively well during the long slow assent of all nations out of the current global recession but expect 2011 to not be as stellar for Canada (i.e. OK but not stellar). That said, I’d consider the advice of Bill Gross quoted here with some caution.

     

    If the challenges for the US to which he refers by inference are relatively mild, then he is correct to assume that Canadian sovereign debt is a good choice. If, however, the international exchange rate of the USD tanks (something I don’t believe will happen within the foreseeable future), then the Canadian economy and revenues for governments at all levels in Canada and therefore the exchange rate of the Canadian dollar will also be under serious downward pressure (after perhaps an initial jump at the beginning of the USD difficulties). The Canadian economy is just too integrated with that of the US for the fate of the Canadian dollar to diverge significantly from that of the USD over more than a few months. Likewise, perhaps over a longer timeframe and not to the same extreme, the Canadian economy and with it the capacity of governments in Canada to raise sufficient tax revenue to meet their obligations will move in sync with the US pattern.
    31 Dec 2010, 05:15 PM Reply Like
  • Tack
    , contributor
    Comments (16513) | Send Message
     
    Oh, Bill....

     

    Wasn't this the same guy, who only about 48 hours ago was touting municipal bonds, as an oversold sector and presenting a good risk/reward scenario? Did I miss something, or are the bonds of U.S. states and municipalities now denominated in some currency other than dollars?
    31 Dec 2010, 06:59 PM Reply Like
  • glennbahia
    , contributor
    Comments (97) | Send Message
     
    Beware the fx risk (esp. in long dated debt) when considering Brazil - the Real is probably the most overvalued currency on the planet - yes even beats out the AUD - you are safe while the commodity boom continues but other considerations are an early end to QE2, some show of fiscal responsibility from Congress and economic progress in the US that could lead to expectations of tightening sooner than anticipated- all could delay the dollar doom scenario
    31 Dec 2010, 07:28 PM Reply Like
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