Pacific Investment Management Company’s Bill Gross, an influential figure in the U.S. financial industry, recently advised investors to buy U.S Treasury securities, and cautioned them to stay away from the euro.
However, businesspeople seeking to make money never reveal their money-making secrets.
Gross manages Pacific Investment Management Company’s 240-billion-U.S.-dollar Total Return Fund, the largest bond fund in the world. Without investors』 knowledge, he eliminated the fund’s holdings of Treasuries last year, when others were queuing up to buy Treasuries.
Gross recently claimed the U.S. dollar is the 「cleanest dirty shirt.」 His view is correct. However, it should be noted that as a fund manager, Gross is good at buying low and selling high. Fund managers often take advantage of their information resources to first drive down the price of a security and buy it, and then to drive up its price and make a profit from selling it.
Both the euro and U.S. dollar used to serve as safe havens. However, the euro is now in deep crisis due to the euro area’s debt problems, and Treasury bonds are not necessarily risk-free.
Columnists of the U.K. Financial Times are still saying ironically that Washington has nothing to do with wisdom. But, from a series of market and governmental measures currently adopted by Washington, it could be seen that Washington is quite wise and intelligent: the U.S. government still raised the debt ceiling after the confrontation between the two parties and will raise it once again in Jan. 14. Although the Republican Party showed a tough stance, it showed it only for outsiders.