Bill Gross has added fuel to fire, stating that centrally planned economic models are losing their credibility among investors and bitcoin and blockchain offers an alternative.
The high-profile fund manager and philanthropist said central bank policies were like gamblers, doubling down on bets each time they lose. The problem is, he added, that only works if you have an unlimited supply of new money.
Moreover, central banks’ more recent policies — like low or negative interest rates — threaten the very fundamentals of capitalism. These include a need to foster savings, promote investment and produce real economic growth.
Gross’ comments echo Bitcoin.com’s own opinion — that Bitcoin offers an alternative economy to our increasingly centrally-planned version.
In his October investment outlook, he wrote:
“Bitcoin and privately agreed upon blockchain technologies amongst a small set of global banks are just a few examples of attempts to stabilize the value of their current assets in future purchasing power terms.”
Gold also offers an alternative outside the system, he said. Investors are just now beginning to challenge official models.
The problem for banks is they have little or no choice but to participate in markets as they exist, Gross continued. Likening central banks to casinos, he said it would not end well for investors and savers. These people are “are now scrappin’ like mongrel dogs for tidbits of return at the zero bound.”
Notably, Gross was sure to refer to “private blockchains,” suggesting not all solutions with that name present viable alternatives. He seems particularly skeptical of government attempts to paint a healthy-looking face on markets.
Gross, with an estimated net worth of over $2 billion, currently manages the $1.5 billion Janus Global Unconstrained Bond Fund. He also co-founded Pacific Investment Management (PIMCO) and is the largest-ever donor to Doctors Without Borders ($25 million).
There are increasing signs even central banks themselves differ on next moves. This week also saw new comments suggesting Bank of Japan governor Haruhiko Kuroda is about to lose his job.
Japan has been a laboratory for central bank experiments recently, with stock market investments, negative interest rates and massive quantitative easing. These experiments, however, have done little to stimulate the real Japanese economy.
Investors, financial reporters and individuals are beginning to see the difference between figures on pages and real growth. This is sure to escalate in the future, and commentators are increasingly adding Bitcoin mentions to their skepticism. With this added prominence, the public sees Bitcoin as a more credible alternative every week.
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