Yet Gross remains skeptical. "Now that our financial system has been stabilized, one wonders whether California's 'Governator' and indeed the Obama Administration has the capital, the vision, and indeed the discipline of its citizenry to turn things around," he ponders.
If California is to be seen as a microcosm of the United States proper, then there's solid ground for that skepticism. Our established system of paper-shuffling must do an about-face in order to compete in a global economy based on actual production. As Gross sees it, it will take resilience on the part of our elected officials and ourselves in order to ensure that the transition goes smoothly.
Gross does make one thing clear: This environment is not one in which investors should be taking on a lot of risk.
Gross sees "slower growth, muted profit gains, and potential capital destruction via default, abrogation of property rights, and dollar devaluation" contributing to make things difficult for investors in the future.
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