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The cult of equity is dying, but the "cult of inflation" has only just begun, writes Bill Gross,...

The cult of equity is dying, but the "cult of inflation" has only just begun, writes Bill Gross, expecting not just a few years, but decades of an "inflationary solution" to the issues developed economies face. Obviously not great for the holder of long-term bonds, inflation won't be great for stocks either. Jeremy Siegel's 6.6% long-term real return from equities in the 20th century may have been an "historical freak."
Comments (5)
  • Cult of equity? Old Bill gets funnier by the minute. Here we have folks piled into Treasuries, like one of those old '60's college frat ploys to see how many kids could fit in a phone booth, but, it's an "equity cult." He must have to think of something novel to say constantly, as he appears on TV more than some folks with their own show.

     

    Yes, we'll continue to have some inflation to melt away debt, but, equities, in the end, are proxies for the price of everything, and, as inflation raises revenues and profits, alike, so share prices will ultimately follow. Equities will surely be better than any fixed-rate debt issues.

     

    No, it's not different this time.
    31 Jul 2012, 11:32 AM Reply Like
  • Some of these Bills are quite smart and informative. We have Bill Gates assessing the situation and calling for a traditional outcome in the delevering process taking place across the globe, especially where the governments are unable to print their own currency to keep themselves afloat. Then we have Bill Gross continuing to outperform the rest of his peers one tick at a time after having provided the globe three or four years ago with a perfectly logical explanation on Boomers and how their generation cashing out to live on a fixed budget would aggravate an already dire situation--perhaps easily explained as way too many dollars chasing a finite number of securities, driving up their price and losing yield in the process, as the globe faces austerity and dwindling disposable incomes.

     

    Perhaps gold and silver will regain their historical place in this protracted scenario of inflation and delevering? Is this what most experts identify as stagflation or will worsening conditions eventually lead us to economic depression worse than what our grandparents endured? Who's got the right formula to sail through this nasty situation successfully, with minimal attrition and without resorting to more war?
    31 Jul 2012, 11:47 AM Reply Like
  • Bill Gross

     

    On July 1st 2009, Bill Gross said low asset returns for the coming years are the “new normal”. Eighteen months after Bill Gross’ super genius prediction, the S&P 500 ETF SPY went up by 43.7%.
    11 Aug 2012, 02:58 PM Reply Like
  • Even God made a mistake when he put Adam & Eve on Paradise and trusted them to follow directions. Bill Gross is not God, but he's a god to some whose wealth he has grown over the years. If we use the SPY as a reference, everyone who bought the S&P 500 ETF SPY in 2000 is still underwater as are those who bought the Dow Jones ETF DIA and the entire Nasdaq. Picking and choosing bits and pieces of data to prove a point and sound brilliant doesn't make one an investment guru, but Bill Gross is one.
    12 Aug 2012, 08:32 AM Reply Like
  • Japan's up to QE8 over the past 23 years , and they're still deflating
    22 Oct 2012, 04:36 PM Reply Like
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