Bill Gross and Monetary Psychological Operations

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ashvinp
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Bill Gross and Monetary Psychological Operations

A piece discussing the "end" of QE and its relation to TRF's (Pimco flagship fund) net short position on treasuries.

Quote:

Every so often, and more often than not, a rumor emerges in the blogosphere about a significant development, seemingly adverse to the interests of the U.S. federal government, being manufactured by the government to further solidify their control over the masses. Sometimes these rumors are plainly absurd on their surface, and sometimes they are just too perfect to be true. The nature of these "psy-ops" is that they are nearly impossible to verify with any direct evidence until well after the fact, so we must rely on indirect logical analysis and a bit of intuition.

Personally, I always find it curious when a piece of news that pops up into the public domain just doesn't seem to fit in with the systemic realities that I otherwise perceive. It could be that I am simply taking these realities for granted and it is time to re-evaluate them, but it could be that they don't fit because they were never intended to. A report last month from Zero Hedge showed that PIMCO had reduced the Treasury exposure of its Total Return Fund (TRF) from 18% to 0%, and a more recent report has shown that it actually has a net short position on Treasuries. [1].

Pimco is the world's largest bond fund, and its manager Bill Gross has been quite vocal over the last two years about the U.S. Treasury's massive and unsustainable deficits. He was so vocal about it that he decided to load up on Treasuries and make a killing from February of 2009 until July of last year, with only a few brief respites in between. That's just the type of person Bill Gross is - he's a shark wading in the deep blue waters of Wall Street, and, like most other ones, he's an "insider trader".

He went on a Treasury-buying binge in February 2009, just in time to fully ride the coat tails of the Fed's QE operations that commenced in March and monetized $300B in long-term Treasury debt. [2]. No one in the public domain knew about the existence of this program in February, or the extent to which it would be carried out. It's not about economic fundamentals and it's certainly not about principles or "what's right", it's only about money and, specifically, lots and lots of money.

Full piece at TAE - http://theautomaticearth.blogspot.com/2011/04/april-12-2011-bill-gross-m...

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