Home etftrends.com Gundlach: Modern Monetary Theory ‘Complete Nonsense’

Gundlach: Modern Monetary Theory ‘Complete Nonsense’

An article in Bloomberg reports that in a recent webcast, DoubleLine Capital’s Jeffrey Gundlach characterized modern monetary theory (MMT) as “a completely fallacious argument.”

Gundlach joins a group of critics of the concept– that the U.S. can’t go broke because it borrows in its own currency and can print dollars to cover its obligations—asserting that the idea is “ridiculous…What happens when the economy turns down?” He suggested that it could lead to a “significant boycott” of long-term bonds and argued further that the “shocking” growth in the U.S. debt burden (to over $22 trillion) will lead to a weaker dollar.

Gundlach also voiced concern regarding the U.S. corporate debt market, asserting that most investment-grade debt would be “junk if graded on leverage metrics, and will be re-rated to that level in the next downturn.” He attributed the stock market rebound to a “remarkable, 180-degree turn” by the Fed, but expects stocks to fall over the course of this year.

For more market trends, visit ETF Trends.

newETFs.io respects the hard work of others and gives all credit to the remarkable folks at ETFTrends.com. This excerpt/article was pulled from their RSS feed; click here to view the original. Please note that on occasion, the RSS feed will not have the author. When this happens this site defaults the author to "News". Make no mistake, this excerpt/article was not created by newETFs.io, it was simply shared with you.