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Author: commoncents33 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 212565  
Subject: Re: bill gross, damages, Date: 10/3/2012 5:03 AM
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Unless we begin to close this gap, then the inevitable result will be that our debt/GDP ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow and the dollar would inevitably decline. Bonds would be burned to a crisp and stocks would certainly be singed; only gold and real assets would thrive within the “Ring of Fire.”

Although I agree with his overall assessment, I must disagree with his separating "stocks" from "real assets". Maybe in the short-term. But long-term, stocks are simply fractions of real businesses, which consist of real assets. So, long-term, owning stocks of sound businesses should so okay...likely better than gold and farmland.




People will attempt to argue away his points. And they may be convincing enough to make themselves and their readers feel better.

I read an awful lot of articles from all sorts of sources, and I never really see anyone making any kind of serious argument against the basic premise as laid out by Gross. I can't recall anyone ever laying out numbers and calculations which show we really aren't heading down a train tunnel with a train coming from the other direction. (Maybe Paul Krugman has; I can't stand to read him though, so I would have missed it). There seems to be three types of people in this regard: 1) those who see the harsh reality of decades of over-spending and over-promising, 2) those in denial, 3) those in complete oblivious ignorance to national finance. Problem is, reality will spare no one.
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