Gross: US government must stop picking pockets of savers

The US government needs to tackle its enormous budget deficit by reforming entitlement spending, rather than forcing down rates and pushing up inflation, says PIMCO's Bill Gross.

Gross, managing director of PIMCO, the manager of the world's largest bond fund, says 75% of the US government's budget is entitlement based. He warns without tackling this element of the budget deficit, savers will continue to be fleeced by the US government. He says: "Unless entitlements are substantially reformed, I am confident this country will default on its debt." He says this default will not happen in conventional ways, but by picking the pockets of savers via a combination of inflation, currency devaluation and low to negative real interest rates. "Our clients, who rep...