While Gold may be getting ahead of itself, perhaps it’s related to the Ponzi scheme called QE2?
Bill Gross, manager of the Worlds largest bond fund states:
Going into next week’s elections, Gross said voters need to realize that this Ponzi scheme is unusually “brazen” and has been brought on by the government – of every political party – and its citizens.“It is not a Bernanke scheme, because this is his only alternative and he shares no responsibility for its origin,” he said.
Such a plan “raises bond prices to create the illusion of high annual returns, but ultimately it reaches a dead-end where those prices can no longer go up,” Gross wrote. “Having arrived at its destination, the market then offers near 0% returns and a picking of the creditor’s pocket via inflation and negative real interest rates.”
Oh and let’s not forget that Pimco, or at least Gross’ fund no longer holds any US Treasuries. As recently as June of 2010 63% of the fund was in Treasuries.
PIMCO’s Total Return Fund, the world’s largest bond portfolio, unloaded all of its remaining U.S. Government-related holdings in February. The fund’s Treasury holdings’ recent peak was back in June 2010 at 63% to then steadily fall since to where they are now slashed to 0% from 12% ($28.6 bln) in February. Certainly a statement of first a vote of no confidence in the U.S. budget situation but also an indictment of the current artificial low interest environment.
Further research (i.e. googling) shows that Bill Gross is actually short US Treasuries. The worrisome part is so many people think he’s right. That said, over a longer period of time, I don’t see how he can possibly be wrong.
