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Source link: http://archive.mises.org/3616/a-gross-error/

A Gross error

May 23, 2005 by

PIMCO’s Bill Gross has recently switched from calling official US inflation figures a ‘con’ to betting the firm’s money that the CPI has ‘peaked’. He’s since been joined on this bandwagon by a number of less estimable pundits, all keen to rationalize the latest bond market rally post hoc and leading Bloomberg News to report that “Greenspan fights a war that bond traders say he has won”.

Here is where you will find why we wholly disagree.


JC Ernharth May 24, 2005 at 2:02 pm

An argument for sufficient diversification and being more conservative “than average”. (Although, what “is” conservative these days!?!?)

Seems to me, though, that while Gross makes those comments (which are disappointing), he is sufficiently leery of the recover just the same. He is still one of the few among the mainstream that sees through a large part of the illusion everyone else still buys into.

And who can argue with his broader assessment, that the emperor’s buttocks are well exposed and his threads are so poorly stitched that a solid breeze could cause problems?

kennycan May 25, 2005 at 11:57 pm

As I read it Gross does not think the massive deficit and stimulus injected by government has been a failed policy. That is why he precribes more of the same. I think he believes that it is the person(s) at the top doing the manipulating that have no clothes, rather than the process itself. Now if someone else were pulling the levers, the process would work. It’s the same old canard – Socialism will work, it’s just never been properly applied. And George Bush is not the one to properly apply it. After all running deficits by lowering taxes isn’t the right way. Raising Govt spending while raising taxes slightly less is the right way to run deficits…

I was being sarcastic in that last statement. I believe in lower govt spending and commensurate lower taxes and market forces determining interest rates will lead to long run economic health. Please don’t think I endorse what Gross wrote.

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