PIMCO Goes Short US Government Debt, Raises Cash Holdings!

Unless entitlements are substantially reformed, the U.S. will likely default on its debt; not in conventional ways, but via inflation, currency devaluation and low to negative real interest rates. Source: http://www.pimco.com/EN/insights/pages/skunked.aspx

• When the biggest bond fund in the world reverses direction and shorts US treasuries, you know the end is near for the US government Ponzi scheme. It is QE to infinity. People who say the FedRes will end QE is deluded by their propaganda. I believe that foreign countries will start the liquidation of their US treasuries soon. They know full well that the debts will not be paid back except in devalued dollars. What is the point of holding US treasuries when you get paid back in toilet paper USD? The dominoes will start falling as sales beget more sales and beget even more dumping of US IOUs!
   
• Bill Gross is a consummate insider. He knows what is going on. You can’t be stupid when you are managing US$236B, the largest bond fund in the world.
   
  PIMCO goes short US government debt, raises cash holdings
  (Reuters) – PIMCO has shifted to a short position in U.S. government-related debt in the world’s largest bond fund, while also raising cash holdings in a sign of the asset manager’s serious concerns about the U.S. fiscal outlook.
   
  The portion of PIMCO’s $236 billion Total Return Fund held in U.S. government debt, including U.S. Treasuries, was -3 percent of total assets in the fund as of March, down from zero in February, the firm’s website showed. Cash equivalents, securities with maturities of less than a year, rose to 31 percent of the fund’s assets compared with 24 percent in February.
   
  PIMCO and its outspoken co-chief investment officer Bill Gross have been raising alarm this year about who will support Treasuries once the Federal Reserve ends its bond purchase program as scheduled in June. The Newport, California-based fund manager shed all its U.S. government-related debt holdings earlier this year and has begun to wager against the asset class.
   
  … for the full article click here!

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