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Bill Gross: Understated Inflation Means Commodities, Emerging Markets Should Outperform

"By the rude bridge that arched the flood, here the embattled farmer stood and fired the shot heard round the world."

Concord, Mass. USA 1776.

Many men with many rifles ended royal governments around the world and replaced them with massively costly and totally overbearing elected governments throughout the 18 and 19 hundreds.

The consequences are upon mankind as the 21st century begins.
The costs of running governments which do nothing but miss allocate resources for wars and roads and space shots and money printing and and set up a multitude of regulations and set up cartels and etc are now reducing real per capita wealth even as most countries chop their populations by one method or another. One child laws in China, abortion in the USA for examples.

The USA, led by lawyers who now control the three branches of its governments from town to federal level and who enrich themselves by taking money from the corporations they ease into monopoly power positions with permit power and other means.

Hey, but the good news is that bad governments always crash and burn while the poor inherit the earth and plod on. The western Roman empire crashed and never rose again while a new religion arose. The eastern Roman empire crashed and a new religion arose. The British empire crashed in World War I. The Russian and Germain governments spent the 1900's crashing and burning over and over.

The individual is alway self educated and will learn what works. Thanks to Bill Gross and others who let the real situation be known.

Global Dividend Yield Trends

Thank you for the great graphs. We believe that dividend yields show what the market demands. Dividends support stock valuation by giving stockholders something for their money investment. The great collapse of stock prices in 2000 to 2003 resulted form the lack of dividends to support prices.

There is more to the graphs which should be of interest to those who buy, sell, and own stocks.

!. The pattern of yields responds to the business cycle and rises when business are exposed to recession periods because price to earnings ratios fall in recessions as investors become more skeptical of growth in future earnings and want more dividend yield in compensation.

2. The long-term trend in rising price to earnings ratios and thus declining dividend ratios from 1980 to 2000 has reversed since 2000. This has placed dividend rations to stock prices in a new long term uptrend with cyclical oscillations. That means the stock price to earning ratios are now in a long-term down trend with dividends now as important or more important than earning to investors.

These changes call for massive firings of board of director and company officers who are looting any company and its shareholders of cash and are really incapable of doing anything else.