Bill Gross: Without A Gigantic Reform Of Entitlements, America Will Default

bill gross

PIMCO boss Bill Gross has been warning against Treasuries for a while, and recently he abandoned them completely.

In his latest investment outlook, he warns that America will default, thanks to trillions in entitlement obligations:

…the only way out of the dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways: 1) outright via contractual abrogation – surely unthinkable, 2) surreptitiously via accelerating and unexpectedly higher inflation – likely but not significant in its impact, 3) deceptively via a declining dollar  – currently taking place right in front of  our noses, and 4) stealthily via policy rates and Treasury yields far below historical levels – paying savers less on their money and hoping they won’t complain.

You can download the full report here (.pdf)

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