In rhetorical prose that has become his signature, PIMCO chief Bill Gross took to the Washington Post on Wednesday to explain his position on the deficit and debt debate now consuming the nation’s capital.
“To raise or not to raise the debt ceiling; that is the question,” Gross begins, in a flowery style familiar to readers of his monthly economic outlooks. “Whether ’tis nobler to suffer the slump and arrows of default today or in some distant future. Oh, bards of Washington, give us your answer.”
He wastes little space getting to his point, which is to call Washington politicians out for the game of chicken they’re currently playing with America’s finances.
“This Shakespearean financial dilemma hangs in the balance between now and a somewhat theoretical Aug. 2, but I can tell you what an unbiased investment manager thinks,” according to Gross. “Don’t mess with the debt ceiling. Raise it unencumbered if necessary.”
He backs his claim of an absence of bias in part on the fact that PIMCO owns few Treasury securities. The company’s clients would “theoretically benefit if yields rose on an under-owned asset class that was technically in default. But default would still be a huge negative for the U.S. and global financial markets, introducing fear and unnecessary volatility into the economy and global trade.”