PIMCO's Gross blames central banks for global economy 'shipwreck'

PIMCO's Bill Gross has said the Federal Reserve and other central banks are to blame for "the current shipwreck" that is the global economy.

The manager of the $260bn PIMCO Total Return fund has said central banks' zero bound interest rates have failed to encourage borrowing as increasing regulatory risks for the banks and low consumer confidence have thrown a "monkey wrench" into such models. "For the current shipwreck perhaps we have the Fed and other central banks to blame. Zero bound interest rates according to their historical models should inevitably and inexorably lead to dynamic real economic recovery. "Who would not borrow at near 0% yields - namely the banks - in order to re-lend at seemingly profitable spreads? ...