{"id":32875,"date":"2012-10-10T12:38:38","date_gmt":"2012-10-10T16:38:38","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=32875"},"modified":"2012-10-10T12:38:38","modified_gmt":"2012-10-10T16:38:38","slug":"bill-gross-says-gold-will-thrive-in-ring-of-fire","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/10\/10\/bill-gross-says-gold-will-thrive-in-ring-of-fire\/","title":{"rendered":"Bill Gross Says Gold Will Thrive in \u2018Ring of Fire\u2019"},"content":{"rendered":"

By Chris Vermeulen, TheGoldAndOilGuy.com<\/strong><\/a><\/p>\n

\n

Bill Gross is one of the most recognizable names in the investment world. He is the founder and co-chief investment officer at bond fund giant PIMCO. His long-term track record regarding bonds is among the best and he still runs the world\u2019s biggest bond fund, the PIMCO Total Return Fund.<\/p>\n

Gross is also known for speaking quite bluntly about the United States\u2019 growing debt problem. His latest monthly market commentary came with a warning for the U.S. and investors alike. Gross stated that a number of recent studies have concluded that \u201cThe U.S. balance sheet, its deficit and its \u2018fiscal gap\u2019 is in flames and that its fire department is apparently asleep at the station house.\u201d<\/p>\n

The recent studies Gross pointed to came from the Congressional Budget Office, the International Monetary Fund and the Bank of International Settlements. The studies calculated that the United States needs to cut spending or raise taxes by 11% of GDP over the next 5-10 years. This translates to $1.6 trillion per year. That compares to the country\u2019s 8% of GDP deficit in 2011. Those numbers put the U.S. in the \u2018ring of fire\u2019 with other countries with similar fiscal gap sizes. These countries include Greece, Spain, Japan, France and the U.K.<\/p>\n

Gross warned that the U.S. debt problems have put the country in this \u201cring of fire\u201d that will burn most investors. The only investors who will not get \u201cburned\u201d? He says the lucky few will be those that are protected by gold and other real assets, protected from a severe U.S. dollar depreciation caused by the Federal Reserve\u2019s money printing.<\/p>\n

In a white paper<\/a> titled \u201cGOLD \u2013 The Simple Facts\u201d posted on PIMCO\u2019s website, PIMCO analysts Nicholas J. Johnson and Mihir P. Worah also said some interesting things. Here is an excerpt, \u201cOur bottom line: given current valuations and central bank policies, we see gold as a compelling inflation hedge and store of value <\/em>that is potentially superior to fiat currencies.\u201d They pointed out the positive supply\/demand characteristics of gold as a big plus in their scenario. The PIMCO analysts went on to say, \u201cWe believe investors should consider allocating gold and other precious metals to a diversified investment portfolio.\u201d<\/p>\n

That is quite a statement coming from a \u201cmainstream\u201d investment firm. Wall Street\u2019s usual reaction to gold is that it is a barbarous relic whose only use is in jewelry and that no sane investor should put any money into it, even paper gold instruments such as gold ETFs like the SPDR Gold Shares <\/strong>(NYSE: GLD) and others.<\/p>\n

After Bill Gross\u2019 bullish words, gold prices were trading a 7-month high on Thursday before falling Friday to finish the week at about $1776.00 an ounce.<\/p>\n

\"Gold<\/a><\/p>\n

Gold Investing Newsletter<\/p>\n

From a technical analysis point of view gold, silver and gold miners have been holding value at key resistance levels. While we could see a 3-5% pullback before they breakout and start the next rally overall the outlook for precious metals remains very strong and I put a $2400 per ounce on gold for 2013. My daily analysis and trade ideas are available at www.TheGoldAndOilGuy.com<\/strong><\/a><\/p>\n

Chris Vermeulen<\/p>\n

 <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By Chris Vermeulen, TheGoldAndOilGuy.com Bill Gross is one of the most recognizable names in the investment world. He is the founder and co-chief investment officer at bond fund giant PIMCO. His long-term track record regarding bonds is among the best and he still runs the world\u2019s biggest bond fund, the PIMCO Total Return Fund. Gross … <\/p>\n

Continue reading “Bill Gross Says Gold Will Thrive in \u2018Ring of Fire\u2019”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-32875","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/32875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=32875"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/32875\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=32875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=32875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=32875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}