Bill Gross and Frogs

wealthymatters.comUsing the metaphor of frogs Bill Gross explains Financial Repression and the ways of dealing with it.Of course he speaks of the situation in the US but there is no reason why investors in other countries whose governments are struggling with debt can’t learn from him.All said and done not for nothing he is the Bond King!

To quote him “Put a frog in a kettle of boiling water and he’ll jump out faster and further than any of those blue ribbon winners at the Calaveras County jumping frog contest.Put him in a pot at room temperature, however, slowly turn up the temperature to boiling, and you’ll have frog legs for dinner. This latter, more unfortunate toad temporarily adapted to his external environment, which seemed like a practical thing to do, until – well, until he reached 212 degrees at which point he was cooked.”Financial repression is similar to slowly turning up the heat on poor froggy/the bond holder/saver. And the boiling point is when the nominal returns on bonds turns negative. Read more of this post

%d bloggers like this: