Pimco founder Bill Gross lays out some ugly economic predictions in the latest issue of Forbes, but also offers a tip for how investors can profit from the U.S. financial woes: by buying preferred shares and senior debt of financial companies benefiting from the government’s bailout spending spree. In the past year, writes Forbes’ Bernard Condon, Gross has bought $100 billion worth of such investments. Gross thinks the government will want to ensure that it gets paid back the money it has given to these financial firms, and thus will keep doing — and spending — whatever it takes to turn them around.

In the meantime, Gross says preferred securities are the bargain of a lifetime. “It’s the most incredible value I’ve ever seen,” the long-time manager says, adding. “This is the Super Bowl for money managers. The opportunities are just enormous.”

One firm in particular Gross has focused on is AIG. Writes Condon: “There is no chance, Gross says, that the U.S. will let AIG walk away without paying [the $200 billion it has received from the government] back. So he’s picked up 5.3% of AIG subsidiary International Lease Finance and 4% of its American General unit at yields of 17% and 39.9%, respectively. ‘We’re buying $10 million and $20 million a day,’ Gross says. ‘It’s being spit out by deleveraging hedge funds.'”

Bargains in preferreds are the good news. The bad news is that Gross sees a lot more economic pain coming. He thinks Americans will “shift from risk to thrift for at least a generation,” writes Condon, adding that Gross sees lower profit margins and stock gains that “slow to a crawl”. Gross also says investors may use stocks as yield vehicles rather than growth instruments, as was the case in the 1930s and 1940s. Stocks will return 6% or 7% a year, “‘if we’re lucky”, he predicts.