In an interview on FOX Business Network’s (FBN) Intelligence Report with Trish Regan (weekdays, 2p-3p/ET), billionaire bond investor Bill Gross discusses Great Britain exiting the European Union (Brexit) and Republican presidential candidate Donald Trump. When asked whether other countries will move out of the E.U., Gross said, “they’re going to move in that direction.  Spain has an election this weekend.  France is making noises.  Other countries in euro-land are basically displeased with the status quo as well.” When asked whether he would support Donald Trump for President Gross said, “Yes, I think so… If he calms down” and that  “I think he’s got some points.  He represents the movement that we saw last night.”

Pimco Bill Gross Janus Capital
Bill Gross at the Morningstar conference in Chicago – June 19th 2014

Bill Gross on whether he would support Donald Trump for President:

“If he calms down, if he tempers his enthusiasm, I’d support him.  At the moment, he appears to be doing that for the last few days, but he’s got to show some stability and he’s got to be an adult as a teenager… I think he’s got some points.  He represents the movement that we saw last night, and to the extent that that’s going to be a positive in the short-term, perhaps not.  But I think ultimately, some of his policies could be a positive in the long-term.”

Bill Gross on whether what we’re seeing in American politics is similar to what’s happening overseas:

“Well I think so.  And I think, although Trump has many sides to his face, it’s fair to say that two of the dominant trends that he’s been suggesting as an agenda have to do with less free trade and had to do with immigration.  And that’s a fair question to ask, because up until this point, the establishment, and it’s not just been Democrats, but many Republicans too in terms of their orthodoxy, have supported free trade.  They believe in Adam Smith and the invisible hand.  Well, the invisible hand has been visible for labor ever since NAFTA and they’re getting a rather raw deal, and we see that not just in the U.K. but we see that potentially in the United States and we see that in other countries in Europe.  So this is a movement that has been sparked by last night’s vote and will probably continue.”

Bill Gross on whether other countries will move out of the EU:

“Well, they’re going to move in that direction.  Spain has an election this weekend.  France is making noises.  Other countries in Euroland are basically displeased with the status quo as well.  Our elections are in November, and so they’ll be preceded by unrest in Euroland, but yes, this is something that’s continuing, and what will the effects be?  Well, these are populist themes, just to describe them, like them or not like them, but they tend to be deflationary if they’re put into effect, they restrict trade, they slow immigration, and they ultimately slow real growth.  Now those are all negatives, but for labor and for wage earners, to the extent that they benefit with higher real wages, for them, it’s a good deal.”

Bill Gross on whether the U.S. economy is going to suffer:

“I think it won’t be promoted.  Growth will benefit from this, but I think ultimately, it may.  Here’s a long-term point to consider.  The capitalism depends upon consumers, we know that.  Without consumption, you don’t have profits and you don’t have sales.  And consumers, basically, you come from the middle class and the wage earning public, and so we need a vibrant and healthy balance between profits and wages, and yes, to the extent that some of these alternatives that are being proposed, as we’ve seen last night, promote wages as opposed to profits.  It’s a negative in the short run.  That’s why you see the Dow down 500 points.  But over the long-term, to the extent that there’s a balance and that consumers actually have some money to spend going forward, I think it’s a long-term positive if it doesn’t go too far.”

Bill Gross on whether he was surprised by Great Britain leaving the E.U.:

“I think we’re all surprised to some extent because we’re poll followers, and the polls basically said it was going to be a win for the stay camp.  But I’m not surprised after the fact, because 52 percent of the voters last night rejected the status quo.  The act, I think, is metaphorically similar to the Arab Spring, but hopefully with a longer shelf life.  It’s an attempt by labor and wage earners to have their agenda heard, whether it’s on immigration, globalization, or declining real wages, which you’ve spoken to with Charlie Gasparino.  I think he has some very good points.”