“Bond King” Bill Gross’ latest “Investment Outlook” notes the escalating War on Cash…
There is a somewhat suspicious uniform attack on high denomination bills of global currencies.
Noted economists such as Larry Summers; respected journalists such as the FT’s Gillian Tett, central bankers such as Mario Draghi—all seem suddenly concerned that 500 euro or 10,000 yen notes are facilitating drug dealers and terrorists (which they are). But what’s an economist/central banker doing opining on law enforcement?
It appears that the one remaining escape hatch for ordinary citizens is being closed. [emphasis added] Money in a mattress will heretofore be associated with drugs/terror. The cashless society which appears over the horizon may come sooner than the demise of the penny!
Gross offers two suggestions for income investors. These will keep them safe in a negative interest rate world:
- Only invest in short maturity bonds (one to three years).
- Use mild leverage (i.e., borrow) to increase returns to 5-6%. Beware of high-risk securities offering higher yield.
Read Gross’ full March investment outlook right here.