Quantitative Easing and the end of the Bond Bull

by Laura Ehrenberg-Chesler on November 4, 2010

in Bonds,Credit Crisis,Debt,Fixed Income,inflation/deflation

Pimco’s Bill Gross had some strong comments in his “Investment Outlook” this past week.  He states that “check writing in the trillions is not a bondholders friend;it is in fact inflationary…”  He even likened public debt to a Ponzi scheme.

Inflation is the enemy of the bondholder, and particularly for the owners of bonds with longer dated maturities.

One week ago I wrote that maybe a “do no harm” approach, i.e. no more Quantitative Easing, would be best for the economy.  Bill Gross agrees in the long run it will be best for everyone.

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