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The “Bond King”: Buy Gold, Not Bonds

Posted By admin On September 10, 2012 @ 1:18 am In Money Watch | Comments Disabled

Washington’s Blog [1]
Sept 10, 2012

Bill Gross – the world’s pre-eminent bond fund manager, nicknamed the “Bond King” – is the boss at Pimco, the world’s largest bond fund, with $1.8 trillion dollars under management.

Gross told Bloomberg:

[There’s] a diminished or dying cult of both bonds and stocks from the standpoint of a belief that they can return 10% ….

Gold can’t be reproduced.  It could certainly be taken out of the ground in an increasing rate but there’s a limiting amount of gold.

And there has been an unlimited amount of paper money over the past 20 to 30 years and now – in this period of central bank expansion where it’s QE1 or QE2, or whether it’s the LTROs of the ECB or this potential new program … then central banks are at their leisure to basically print money.

Gold is a fixed commodity that has a considerable store of value that paper money has not….

When a central bank starts writing checks and printing money in the trillions of dollars, it’s best to have something tangible that can’t be reproduced, such as gold.


Gold … is a better investment than a bond or a stock, which probably will  only return a 3 to 4 percent return over the next 5 to 10 years.


Gross doesn’t believe that gold is a crowded trade at this point.

See this for background [2].

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[1] Washington’s Blog: http://www.washingtonsblog.com/2012/09/the-bond-king-buy-gold-not-bonds.html

[2] See this for background: http://www.washingtonsblog.com/2010/12/is-gold-or-fiat-currency-in-a-bubble.html

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