Bill Gross: Bonds "Burnt to a Crisp"

Bill Gross, co-founder of PIMCO with $270 billion under his management, probably knows bonds better than anyone in the world.

Without a drastic change in the near future, we're in deep trouble.

Gross appeared on CNBC and discussed how America owes way more than most people thing. $16 trillion in debt? Try $60 trillion. That is 500% of GDP.

That figure comes from our current stated entitlements. When you add up what we're committed to spending and add in the $15 trillion in bonds out there, the total debt balloons up to the $60 trillion figure.

In his own words:

“These are studies mainly from the IMF, from the CBO, and the BIS... that basically says a fiscal gap of 8, 9, 10% – actually it is an 11% average which is $1.5 trillion per year -- unless we start to reduce these numbers that yes, we can... [see] bonds being burnt to a crisp and stocks being singed all as a result of basically too much debt relative to GDP and an inability or unwillingness to alleviate the conditions.”

Here is the full clip:

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