Gross: 2013 Fearless Forecasts: 1) Stocks & bonds return less than 5%. 2) Unemployment stays at 7.5% or higher 3) Gold goes up……Here's my response:
— PIMCO (@PIMCO) December 30, 2012
Bernanke is pumping new money into the system as near double digit rates. If he continues
1. Stocks will have a spectacular year. perhaps gains of 10% plus.
2. Stocks and bonds shouldn't be linked. Bonds will crash as interest rates climb, because of a flight away from perceived safety and because of accelerating price inflation.
3. Unemployment will trend lower as a result of the Bernanke money printing induced manipulated boom.
4. Here I am in sync with Gross, gold will go up. However, I suspect Gross thinks it will climb because of a poor economy. I suspect gold will go up because of Bernanke money printing, which will also cause a manipulated boom.
5. Housing prices will soar, 10% plus.
NOTE WELL: My forecasts are based on Bernanke continuing his mad money printing. If he doesn't, the trends will be much different, There are no indications that Bernanke is going to shift policy, but he is the most erratic policy making Fed chairman in history, so anything is possible. This is part of the reason investing at present is so difficult. Fed policy sets the direction for the economy, and a mad scientist is in charge of setting that policy.