PIMCO's Gross Warns Holders of Long-Term Bonds
In his April 2010 Investment Outlook, PIMCO's Bill Gross warns that high fiscal deficits and higher outstanding debt lead to higher real interest rates and ultimately higher inflation, both of which are unfriendly to the bond markets.
In addition, Gross references a recent New York Times article from Douglas Holtz-Eakin, who held the Congressional Budget Office Chair from 2003 to 2005, that the recently passed health care reform will add $562 billion to the deficit over the next decade. Gross' conclusion: "Long-term bondholders beware."
Click here for his commentary.