PIMCO's Mohamed El-Erian Comments on Eurozone Situation on CNBC

PIMCO's CEO Mohamed El-Erian just appeared on CNBC, and gave his outlook on the Eurozone and the broader global economy. On Greece, he said that there was still too much debt and not enough growth. Greece will need another agreement in the future. He characterized the recent deal as something, but said it was stil not enough yet. El-Erian said that, fundamentally, Greece will have to find a way to restroe growth and restore competitivness. If Greece does not, private capital will not come to the country. Without private capital, there will be no organic economic growth. El-Erian stated that the choice for Greece was to decide between internal devaulation--slashing wages significantly--or external devalution--exiting eurozone. El-Erian stated that we continue to see these half-hearted deals because no one wants to make decision on this matter. In terms of good news, El-Erian said that central banks around the world realize that they cannot risk the payment and settlement system--something that did not seem to accept fully in 2008. Still, the bad news comes from the present economic indicators relative to 2008--unemployment and the deficit in the US have gotten worse worse. Overall, there is less flexibility to react to crises. El-Erian stated that investors should unweight equities on the valuation story. While the US economy is healing and there is some growth in emerging markets, investors need to protect against Europe and risk in Iran and Syria. El-Erian recommended that investors take money off the table in equities. He stated that investors should own some gold and oil and concentrate bond exposure in 5-7 year. El-Erian liked oil and gold good even with a strengthening dollar due to uncertainity. He stated that with more central banks pumping money, more people would worry about devaluation of the overall currency complex and many investors are still underweight gold.