Bill Gross is the world’s biggest bond trader. He runs the PIMCO bond fund with over $250 billion under management. He recently disclosed through financial filings that PIMCO has sold every single U.S. bond in its portfolio. Local, state, federal bonds- all sold off. Gross knows bonds are about to default in record numbers. And most importantly, he knows that the last resort of the Federal Reserve buying our own government’s bonds at auction is a certain sign of Armageddon. When no one is left to buy your own debt but you, you have reached the end of a Ponzi Scheme.Read the whole thing and dispair. Then write your local newspapers and tear them up for not reporting on this better.
Then there is legendary Wall Street investor Stanley Druckenmiller. He, too, is calling the Fed’s bond purchases a fraud and a Ponzi scheme. Druckenmiller says, “There is a phony buyer of $19 billion per week of Treasury Bonds.” The phony buyer he refers to is the U.S. government. Druckenmiller knows that when a country resorts to buying its own debt, we are seeing the last days of the Roman Empire.
Another Wall Street legend, Jim Rogers, spoke out at a business conference last week. He said he plans to short sell (bet against) U.S. bonds with both hands. Rogers added, “If any of you have bonds, I would urge you to go home and sell them. If any of you are bond portfolio managers, I would get another job…if I were you, I would think about becoming a farmer.”
Finally, we have the opinion of municipal bond expert Meredith Whitney, named by Fortune magazine as “one of the 50 most powerful women in business,” and by Time magazine as “one of the 100 most influential people.” She sees America in financial ruin with 50 to 100 cities defaulting on their debt in the next year.
What do these financial legends know that the rest of us do not?
Tuesday, May 17, 2011
The US Ponzi Scheme Is Collapsing
The Unraveling of a Ponzi Scheme