Bill Gross, in his second investment outlook since joining JanusCapital Group Inc., said deflation is a “growing possibility” asgovernments worldwide are struggling to create inflation andstimulate growth.

Central banks around the world have made “a damn fine attempt”at fueling inflation, yet their efforts have pushed up financialassets, rather than prices in the real economy, Gross wrote in hisoutlook titled “The Trouble with Porosity and Prosperity.”

“The real economy needs money printing, yes, but money spendingmore so, and that must come from the fiscal side –-from the dreadedgovernment side –- where deficits are anathema and balanced budgetsare increasingly in vogue,” he wrote. Until then, the possibilityof deflation is a challenge to wealth creation, according toGross.

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