Gross: Better State Debt Opportunities Outside US

VIDEO: PIMCO Manager Bill Gross says that right now debt from nations such as Canada, Brazil, and Germany offer better yields and less risk

Eric Jacobson 18 April, 2011 | 12:25AM
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Eric Jacobson: As you and your colleagues have talked for years and the market understands a lot a better now than they once did, I think a lot of that, that buying from Asia is mercantilist-based, as you said the recirculation of currency. There has been a lot of talk in the last year or two speculating what if this goes away? What if suddenly they have a large enough domestic market that they don't need to sell to us as much?

There has been very little, at least in the public sphere perhaps more so in the institutional world, there's a lot less understanding and discussion of what the pace of that might look like. I'm wondering if you have a view that you could share in terms of how either concerned or not concerned you are about the pace of those changes over the next several years and what it might mean for less demand for US-dollar assets.

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Eric Jacobson  is director of fixed-income research with Morningstar.