Bill Gross is a bond fund manager we have huge respect for. Recently, the man who runs the world’s biggest bond fund at Pacific Investment Management Co. said he’s been buying longer maturity Treasuries as protection against Deflation [1]. We believe the timing of Gross buying was more or less around the time when we at bhc investment suggested the Smart Money trades [2]. “There has been significant flattening on the long end of the curve,” Gross said in an interview from Newport Beach, California, with Bloomberg Radio. “This reflects the re-emergence of deflationary fears. The U.S. is at the center of de-levering as opposed to accelerating growth.”
As far as we are concerned, we stand by our prediction of Inflation, not Deflation. Will write more in the coming weeks.
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