Gold and What Moves it.

You know the world is changing when the head of the world's biggest bond fund recommends gold as his first asset choice.

 

In this week's Barron's Roundtable, Bond King Bill Gross affirms his bullish view on gold due to his assessment that central banks will continue to suppress interest rates by purchasing vast amounts of government debt with printed money.  Gross notes that the financial system is now longer operating under free-market capitalism when the Fed is buying a "remarkable" 80% of debt issued by the U.S. Treasury.  Massive deficits are being funded with printed currency on a global scale never attempted in the past and sooner or later, according to Bill Gross, inflation will blow past the central bank's targeted rate of 2.5%.

 

The really big risk comes when huge holders of U.S. debt such as China and Japan become disgusted with U.S. fiscal and monetary policies and decide to dump their ...