US growth would have contracted without trillions in government, consumer debt: Gundlach

REUTERS: U.S. growth appears to be based"exclusively" on government, corporate and mortgage debt and the economy would have contracted if the United States had not added trillions in debt, Jeffrey Gundlach, chief executive of DoubleLine Capital, said in an investor webcast on Tuesday.

"Nominal GDP growth over the past five years would have been negative if U.S. public debt had not increased," said Gundlach."One thing everybody seems to miss when they look at these GDP numbers ... they seem to not understand that the growth in the GDP it looks pretty good on the screen is really based exclusively on debt - government debt, also corporate debt and even now some growth in mortgage debt."If the U.S.

Against this debt backdrop and financial markets"addicted to Federal Reserve stimulus," these are"very, very dangerous times" for the next U.S. recession, Gundlach, who oversees more than US$130 billion in assets at DoubleLine Capital, said.Gundlach said although the United States is not headed into recession anytime soon, there are some weaknesses showing up in the U.S. economy.

Gundlach said U.S. stocks and bonds are headed for a volatile environment and that he is"comfortably" long gold. He has been long gold since the US$1,190 level, he said. Gold prices are headed toward US$1,300 an ounce.

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