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:
Add a Comment (Pro Members Only)
More like this...Renowned Bond Manager: "Bails on Bonds"
Renowned bond investor Dan Fuss urges investors to bail on bonds before it's too late...
5 Things You Need to Know About Bonds
My point of view on bonds as investments or income sources is simple...
Buying Bonds vs. Buying Gold
In these irrational global markets, which is really the better bet long term?