By Tom Bradley

As managing director of a firm that manages US$1.2 trillion, Bill Gross’ words carry a lot of weight. Indeed, we blog on his writings often.

In his April letter, he closes with a tight and powerful summary:

“I am confident that this country [U.S.] will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates.”

Mr. Gross and his team have put their money where their mouth is. Pimco owns virtually no U.S. Treasury bonds on behalf of its clients, which is remarkable given the size of the Treasury market and the size of Pimco.