Foreign Stocks Offer Better Investment Than US: Gross

The weak dollar will mean meager returns on US stocks and bonds for years, so US investors need to look at overseas markets for better yield, Pimco's Bill Gross told CNBC Tuesday.

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"The developing world grows at a much faster rate, so investors should be looking outside the United States," he said. "Especially if the dollar is declining and reducing your standard of living and purchasing power."

Among those areas where he expects better growth—and returns: China, other Asian countries, Australia and Canada.

"Non-dollar currencies, in combination with higher growth, is really the receipe for investment success," he said.

Gross said he expects the Fed to begin another round of easing soon, which he called "a last gasp."

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The Fed, he said, will begin "buying hundreds of billions of Treasurys with the hope that lower interest rates will stimulate the animal spirits, forcing investors to buy stocks" because bonds offer such low yields.

Gross said that if the Fed is successful in stimulating economic growth over the next few years, stocks will be the main beneficiary.

"At the moment, I still think stocks are the favorite investment vehicle (over bonds)—as long as we have some ray of sunshine out there that permits a hoped-for expansion."

Gross also dismissed speculation that the might replace Larry Summers as head of President Obama's Council of Economic Advisers.

"A very poor candidate would I be," Gross said. "I would suggest somebody with corporate experience but with a 'Main Street' orientation."