– The “Bond King”: Buy Gold, Not Bonds (ZeroHedge, Sep 10, 2012):
The “Bond King” – Pimco boss Bill Gross – says:
[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.
Has Mr. Gross been reading Zero Hedge?