Bill Gross Reveals The "Global Establishment's Overall Plan" In Eight Simple Steps

Tyler Durden's picture

Continuing his anti-establishment bent, in his latest letter "Red is the new black", Bill Gross first exposes the "current global establishment’s (including Trump’s) overall plan" consisting of 8 simple steps to "solve the global debt crisis" (yes, the sarcasm is oozing), at which point he goes on to say that "it pays to not fight the tiger until it becomes obvious that another plan will by necessity replace it" and adds "that time is not now, but growing populism and the increasing ineffectiveness of monetary policy suggest an eventual transition."

His monthly words of caution: “Red” (in some cases) may be the new “Green” when applied to future investment returns. Be careful – stay out of jail."

The full Bill Gross' latest monthly letter courtesy of Janus

Red is the New Green

I’ve got nothing against national anthems, and I wouldn’t kneel even if I was Colin Kaepernick. I just think as a country, “America the Beautiful” might have been a better choice for ours and that in some cases, some words of “The Star Spangled Banner” don’t ring true. A few countries’ anthems are, in fact, quite pleasing to my ear. “O Canada” has a beautiful melody and words to match, although you’d probably have to be watching hockey to hear it. Our “Star Spangled Banner”? For me – not so much. I can sort of see the “rockets’ red glare”, but it’s hard to sing and quite long – especially if you’re waiting for the kickoff. But like I said, I have nothing against it, except maybe the last stanza. Not the “Home of the Brave” part. Having spent two years in Vietnam, ferrying Navy SEALs up the Mekong Delta, I witnessed a lot of bravery. Not me. I was duckin’ quicker than Bill Murray’s gopher in Caddyshack. The SEALs though. Yeah – tough guys – very brave.

I quarrel however, with the part about “Land of the Free”. Free? For almost all of us – “yes” – but for 3+ million of us? Not really.  

Take a look at Chart I, and be honest if your eyes don’t bug out. More than any country on Earth – in total numbers, or as a percentage of the population, Americans are incarcerated, imprisoned – freedomless.

Of course there’s a legitimate explanation for many of them, but what’s the reason for the rest? Restrictive laws that went too far and tied judges’ hands: California’s “three strikes and you’re out” legislation, for one, that was approved by voters long ago but is perhaps outdated now due to the growing acceptance of marijuana. The privatization of prison management and ownership is even more damning. “Orange Is the New Black” focuses on race and classism themes, but there’s more to the show than that. I’d affirm lead character Aleida Diaz when she says, “We a for-profit prison now. We ain’t people no more. We bulk items, sardines in a can.” I spent one night in a Danish pokey 50 years ago for intoxication, and it was 18 hours too long. We owe it to 1-2 million orange clad prisoners to clean up the system and give validity to our own national anthem.


Well, solving the “Orange Is Not Free” dilemma may take time just as the solution to a global debt crisis (now seven years running) may take even longer. It helps though to understand what the plan is in order to invest accordingly. While I and others have been critical of its destructive, as opposed to constructive elements, it is the current global establishment’s (including Trump’s) overall plan, and the establishment’s emphatic “whatever it takes” monetary policies are the law of our financial markets. It pays to not fight the tiger until it becomes obvious that another plan will by necessity replace it. That time is not now, but growing populism and the increasing ineffectiveness of monetary policy suggest an eventual transition. But back to the beginning which was sometime around 2009/2010:

How policymakers plan to solve a long-term global debt crisis:

  1. As in Japan, the Eurozone, the U.S., and the UK, central banks bought/buy increasing amounts of government debt (QE), then rebate all interest to their Treasuries and eventually extend bond maturities. Someday they might even “forgive” the debt. Poof! It’s gone.
  2. Keep interest rates artificially low to raise asset prices and bail out over-indebted zombie corporations and individuals. Extend and pretend.
  3. Talk about “normalization” to maintain as steep a yield curve as possible to help financial institutions with long-term liabilities, but normalize very, very slowly using financial repression.
  4. Liberalize accounting rules to make some potentially “bankrupt” insurance companies and pension funds appear solvent. Puerto Rico, anyone?
  5. Downgrade or never mention the low interest rate burden on household savers. Suggest it is a problem that eventually will be resolved by the “market”.
  6. Begin to emphasize “fiscal” as opposed to “monetary” policy, but never mention Keynes or significant increases in government deficit spending. Use the buzzwords of “infrastructure” spending and “lower taxes”. Everyone wants those potholes fixed, don’t they? Everyone wants lower taxes too!
  7. Promote capitalism – even though government controlled, near zero percent interest rates distort markets and ultimately corrupt capitalism as we once understood it. Reintroduce Laffer Curve logic to significantly lower corporate taxes. Foster hope. Discourage acknowledgement of abysmal productivity trends which are a critical test of an economic system’s effectiveness.
  8. If you are a policymaker or politician, plan to eventually retire from the Fed/Congress/ Executive Wing and claim it’ll be up to the Millennials now. If you are an active as opposed to passive investment manager, fight the developing trend of low fee ETFs and index funds. But expect to retire with a nest egg.

That’s the plan dear reader, and President-elect Trump’s policies fit neatly into numbers 6, 7 and 8. There’s no doubt that many aspects of Trump’s agenda are good for stocks and bad for bonds near term – tax cuts, deregulation, fiscal stimulus, etc. But longer term, investors must consider the negatives of Trump’s anti-globalization ideas which may restrict trade and negatively affect corporate profits.

In addition, the strong dollar weighs heavily on globalized corporations, especially tech stocks. Unconstrained strategies should increase cash and cash alternatives (such as high probability equity buy-out proposals). Bond durations and risk assets should be below benchmark targets.

On TV, “Orange Is the New Black” yet, in the markets, “Red” (in some cases) may be the new “Green” when applied to future investment returns. Be careful – stay out of jail.

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bigdumbnugly's picture

What a boring intro.

Who cares what he thinks about anyone's National Anthem.

Fuck that fucking fucker and anyone that looks like him.

markpower49's picture

Bill Gross is a typical Baby Boomer, PC on race. He loves his white guilt. Felons should be executed.

NoDebt's picture

Bill's just like the guy on the street holding a sign that says "The end is near!"  Except Bill is a billionaire.

I mean, he's probably right about all this but.... who really gives a fuck at this point?


Stuck on Zero's picture

A lot of things would be fixed if most of Wall Street and Congress ended up in orange.

xavi1951's picture

His chart does NOT indicate how many potential penal residents where simply executed to keep space open in the prisons of all the other countries. 

Most of our arresties make it to prison.  Can't say the same for many other countries.

The Saint's picture
The Saint (not verified) xavi1951 Dec 6, 2016 10:26 AM

They don't call him GROSS without reason!  LOL


BaBaBouy's picture

A Mixture Of Hopium and Ballonium...

MillionDollarBonus_'s picture

Bill Gross hates Trump. When he talks about the establishment, he is talking about the fascist Trump administration and their evil plan for world domination and white supremacy. But trust a fake news site like Zerohedge to misrepresent him!

bamawatson's picture


When a handful of Republicans attempted to link Abedin to the Muslim Brotherhood, John McCain was one of the first to defend her. He praised her as “an intelligent, upstanding, hard-working and loyal servant of our country and our government.”

letsit's picture
letsit (not verified) bamawatson Dec 6, 2016 11:58 AM

The American establishment's plan in 1 simple step: War.

stizazz's picture

Always has been. Always will be.

Rabbi Chaim Cohen's picture

It seems like Gross would have us give into globalization because it isn't awkward like a return to American success and prosperity would be. Best to not be so gauche as to be posperous while the rest of the wstern world is flat on its back.

No thanks Bill. Globalization is the enslavement of everyone (save for the uber-elite) under the pretext of go-along-to-get-along and the reality of one-size-fits-all governance, aka: the equal distribution of mediocrity to all. I'll keep my non-imperialist nationalism and my well-informed/prudent economic protectionism. No one else will protect my interests like me and mine.

stampman's picture

I wholly approve of AUTHENTIC GLOBALIZATION, but what is being shoved at us is a FAKE GLOBALIZATION intituted by a criminal organization consisting of central bank counterfeiters and their perennially related financial fraudsters, corporate ghouls, and war criminals.

I am a sole proprietor with customers in over 90 countries.  GLOBAL FREEDOM IS ESSENTIAL FOR GLOBAL TRADE.

But 'globalization' as it is envisioned today is NOT FREEDOM and NOT PRODUCTIVE.  It is nothing but a moral and legal criminal arrangement that benefits a few to the detriment of many.

It is doomed.

I am quite sure that Bill Gross has never inkled the difference between real globalism and the current effort towards fake criminal globalization.  The fake kind is the only thing he has been able to conceive of thus far, as is the case with most people in general.

philipat's picture

Dear letsit, tazs, techies-r-us, stizazz, lock-stock, beauticelli, Mano-A-Mano, mofio, santafe, Aristotle of Greece, Gargoyle, bleu, oops, lance-a-lot, Loftie, toro, Yippee Kiyay, lonnng, Nekoti, SumTing Wong, King Tut, Adullam, espirit, rp2016, Holy hand grenade of Antioch, amongst many others, I wonder why you continue to talk to yourself? When you use honest disclosure of your Biblical site (Even though the site has no connection whatsoever to your comments) I will  not respond with a SPAM alert. So there is no need to talk to yourself to prevent my SPAM alert appearing right below your fake links. Unless you see the need to congratulate and/or reassure yourself on your clever comments, knowing that nobody else will? Alternatively, it can only mean you are seriously mentally ill. Talking to yourself is not good; you MUST remember to take your meds.

garcam123's picture

You do realize, of course, that Mclame was just trying to get some ass......He's in the hunt all the's what they call "assault with a dead weapon".

stampman's picture

She has an ass?  I thought that was a cubbyhole for Cankles' used toys en route to the swapmeet.

stampman's picture

Another great one, MDB.

You probably have a ball getting the snowflakes and dindus all worked up on other sites posing as a white rayciss.

Care to comment further, MDB?  Double down on this one!

kochevnik's picture

Did whites not make the modern world, MDB?

Who invented that computer you are using?  A white gay man destroyed by hypocrites as yourself, moreover

India beckons for you

stampman's picture

MDB is one of us.

He is the consummate countertroll.

A master of his art.

Ghordius's picture

xavi1951: "His chart does NOT indicate how many potential penal residents where simply executed to keep space open in the prisons of all the other countries. Most of our arresties make it to prison.  Can't say the same for many other countries."

have a look again at his chart. it's only the OECD countries. most of them don't even have executions

Theosebes Goodfellow's picture

~"Most of our arresties make it to prison.  Can't say the same for many other countries."~

Thre are other factors that cook the books in favor of a higher incarceration rate.

1.) The USA is the #1 destination of criminals.

2.) The graph doesn't not distinguish between foreign nationals incarcerated and citizens.

3.) The graph does not account for the rate of recividism, (albeit that in the USA it is among the highest).

4.) We are notoriously lagging in our rate of executions for death row inmates. Look at China, Japan & the Philippines.

5.) Due to #4, criminals commit more henious crimes knowing they won't fry for them.

Really Bill, get a grip.

ThirdWorldDude's picture

And then, there's facts: 

The Prison Industry in the United States: Big Business or a New Form of Slavery?



Yours is a very bad, almost desperate, attempt to rationalize the yellow brick road to Sing Sing...

[Edit] And you shitheads have the audacity to call yourselves "libertarians"...?

Billy the Poet's picture

There's another breed of SJWs who get triggered if you don't applaud their songs or appreciate the designs they make on fabric.

Yog Soggoth's picture

Both of you make good points, but so does Gross without getting into too much detail. Fact is that we have a serious prison problem that needs to be addressed, and it all comes down to the USD, borders, laws, ect. in any argument. Crime usually goes down when people are not desparate. Look at Detroit, it has always had the bad side, but it had it's roots in manufacturing. A citizen could get a job, no matter how unskilled, at one point in time. Right now is just a time to wait until results are in to decide how to proceed, for everyone included, otherwise the individual investor could end up on the wrong end of the stick. 

stampman's picture

" ...the individual investor could end up on the wrong end of the stick."

Well, I come from a group of people who have sold rare stamps to Bill Gross, including one, the unique US Scott #164, that he eventually paid California stamp dealer Jay Tell $398k for after its very difficult, 30 year war of emergence from the supply chain--against the usual suspect relatives of central bankers who did not want to monetize it in our favor, but rather, who tried again and again to 'steal' it for themselves via ankle shots and an awful lot of outright ball kicking in order to make an even greater profit off of Bill than they already had coming.

On the other hand, Bill comes from a group of people who sell mutual funds to muppets, retirement plans, social organizations, trust funds, and so forth.  In other words, all muppets, across the board.

Bill Gross is my muppet.  I have some stamps for him.

I admit, it's easy to make fun of someone who has everything.  There's so much to hit--like the side of a barn.

What do I have?  A few stamps. A few stamps for Bill Gross.

TheABaum's picture

We have a serious CRIME problem that needs to be addressed. Let's imagine we identify incarcerated individuals who are from the following places:


1.) Los Angeles

2.) New York


4.) Philadelphia 

5.) St. Louis

6.) Detroit


You think the prison population would be reduced by 10%, 25%, 50%, more?

The simple reality is big cities are petri dishes for criminal pathogens. 








True Blue's picture

You both, and Bill Gross too -missed a major point. The FED, the FED and also -the FED. Its not entirely your fault that you guys missed it, although I would hope a few on ZH would see it.

First -as 'inflation' eats into people's (in real terms declining) wages, something has to fill in for the loss in the earnings/costs equation -ie more crime. Secondly (but so closely related it isn't funny) 'inflation' also lowers the bar on what is or isn't a 'felony' or 'major' crime. Look -when the gov't arbitrarily decided that any crime resulting in loss greater than $400.00 was a felony you could buy a brand new car or two brand new Harley Davidson motorcycles for less than $400.00. $400.00 was 16 ounces of pure gold! The average laborer had to work an entire year to earn that much! That is why "grand theft auto" is a felony regardless of the vehicle's value. Today, $400.00 a week will barely cover the rent, and is (in today's fix) 1/3 of one ounce of gold; yet, the laws have never been adjusted for 'inflation' -which means, as more and more things become more and more expensive, more and more 'felonies' will be committed as the threshold drops lower and lower, until a day will (soon) come where the 'money' has been debased so much that a simple loaf of bread will be so 'expensive' that its theft will be a felony. Monetary debasement 'inflation' leads into prison inflation because the laws are never adjusted for the loss of value inherent in fiat 'money' (probably because that would bring too big a spotlight on the entire Fiat scam.)

The FED 'targets' a 2% yearly 'inflation' rate, which means (by definition) a 2% increase in the number of felonies -compounded annually. And look where we are today... compare a graph of monetary debasement (inflation) from 1913 to today, and compare it to the prison population over the same time. In this case, correlation is causation.

It. Is. Just. That. Simple.

edit (in case you were wondering, if felonies were to be 'inflation adjusted' -the cutoff should be around $38,800 instead of a paltry $400.00 -what do you suppose the prison population would look like in that case?)

ThirdWorldDude's picture

I get your point, but from the perspective of a historical comparative analysis you're still way off target.

Lemme'xplain: the same inflation calculus that you use is appliccable to all other first world countries, for the sake of convenience I'll take the example of Sweden. 10 000 SEK from 1945 is almost 200 000 SEK in today's "money", which means the inflation in SEK has gone up to almost 2000% in measly 70 years (that's an average inflation rate of 28,5% per year!), which on the other side hasn't contributed to a significant rise of Swedish incarcerated population. There goes your "correlation is causation" thesis. Ooops!

What you clearly miss to address in your rant is the corporate fascist nature of US .gov, which is exactly what has been going on in USA ever since WW2. I am sure you have a point in that corporatism is directly correlated to the FED and how your entire political system is constructed, but more importantly the trend is a sign of a popular complacency (which stems from ignorance or consent, or both). So, instead of blaming the FED or other third parties, why don't you point your finger at your collective Murican self for failing to take action and prevent the fascist takeover of your .gov and country? 

True Blue's picture

Are their laws built around a specific dollar (kroner, franc euro -whatever) figure? If not, then there is no necessary inflation adjustment. Oops! In the US there is a specific dollar number attached to what is and what is not a 'major' crime and that is $400.00. Comparative analysis means not comparing apples to oranges, so in order for me to have been way off target you need to cite an example with similar legal/financial damage distinction between major and minor crime that was passed into law in a similar time-frame. I did not cite inflation alone as the primary cause; but law using a formerly stable currency as baseline for legal distinctions that has become inflationary fiat without the law being changed or adjusted.

I wasn't arguing against either of your positions, just adding a forgotten component; so you just may consider it additional information instead of coming off like a condescending little finger-pointing prick. Popular complacency? You have an outsider's perspective -so make of it what you will, but there is less complacency here than Europe has displayed with its manifold takeovers; from the international socialists of the Eu to the hordes streaming in to those benighted nations unchecked.

I was pointing out a prominent and ignored component in the growth of the US prison complex and you sound off in some useless rant about our collective ignorance?

ThirdWorldDude's picture

Non sequitur! 

You are building your case on the predicament of a given monetary value that would help classify a crime as "minor" vs. "major". Do you think that defendants' attorneys or the judges themselves aren't familiar with that pesky little fact? 

According to the general principles of jurisprudence, all courts exercising their regular course of action are obliged to regard the factual evolution and changes of a (legal) definition from a time perspective. That implies a judicial "revision" of laws legislated many decades ago, in order to correspond to "the spirit of time" in which a certain judicial decision is being made, or to use an economic vocabulary, courts must delve into seasonal adjustment of legal paragraphs, so that ther verdicts aren't anachronistic.

Overall, you make a good point, but address the problem from a wrong viewpoint. The right question in this case would be: Why aren't American courts of law applying the monetary value tied to the classification of crimes from the perspective of monetary inflation? Is it because they're ignorant (unprobable) or because they've become corporate property through unregulated and unacceptable lobbying in the American courthouses?


P.S. Don't shoot the messenger!

True Blue's picture

Look, the pesky little fact is that the LAW says any crime over $400.00 is a felony/major crime. That is The Law and no argument from an attorney can change or interpret the letter of the law, and judges are bound by The Law. The LAW itself must be changed, or it will continue to be enforced. That it is anachronistic and plain wrong makes no difference, it has to be altered or abolished -along with so many others (try 2000+ per year in addition to 87,000 pages of 'regulation' written by un-elected bureaucrats) there is no other way; and with 'sentencing guidelines' even if you found a reasonable judge willing to fairly examine the issue, his hands are tied; bound by the fucking LAW.

I only shot the messenger because he had a supercilious attitude and apparently operates in ignorance of what the LAW binds attorneys and Judges to doing. There is no latitude for 'seasonal adjustments' or leeway for a 'time perspective' with relation to judicial proceedings in the US. If the Law is pegged to an arbitrary dollar figure that simply is what it is until it is legally altered or abolished by action of either State or Federal Government.

The judicial system in your particular little backwater (try not throwing an Australian rule of jurisprudence at me next time, when arguing about American laws -and the US does not give a fuck about UN resolutions unless they go they way the Gov't wants) -your country may not operate that way, good for you! (Your earlier comments displayed a mindset that inflation is adjusted for) but in the US it is not; now, do you have any constructive suggestions short of major bloodshed in the streets and capitols of the US to alter this, or are you just arguing for the sheer fun of it?


ThirdWorldDude's picture

LOL, that was fucking hillarious!  

So, I guess Mr. True Blue has an MSci or a PhD in law then?

stampman's picture

I'm a nonpartisan.  A libertarian is just a guy who doesn't like gummints or anything they do.  Nothing else counts.

I have never heard of a female libertarian.

Theosebes Goodfellow's picture

Sing Sing is closed, asshat. Those facts I point out you don't refute, you simply engage in ad hominem attacks. And when did I call myself a libertarian, fuckwit? So you quote some Canadian site to me? See, ad hominem can run both ways. Pullleeeazzzeee.

ThirdWorldDude's picture

Sorry for the inflicted buttpain, feel free to sue me.

sgt_doom's picture

xavi1951 makes an extraordinarily brilliant point:  just look at Chile for example.  Under Pinochet their rate was even smaller --- of course he disappeared (murdered, and tortured to death) over 30,000 including hapless Americans in the vicinity at the time!

One could same something similar about a number of other countries on the chart!

stampman's picture

"Most of our arresties make it to prison.  Can't say the same for many other countries."

What utter bullshit.

I lived in several other countries.

Each one of them was far safer than your shitty country is.  You could walk the streets at night in their large cities without fear.  They all had low to no crime and very little police presence.  Your shitty country, on the other hand, constantly bristles with violence and hatred.  You live in "La Tierra Del Bang-Bang".

None of those countries ever discriminated against me for the past 48 years for being white or for being male like your shitty country does.

None of those countries has tens of thousands of white collar war criminals like your shitty country does.

None of those countries has a massive endemic drug abuse problem like your shitty country does.

None of those countries has a massive obesity problem like your shitty country does.

None of those countries has a massive bad dental health problem like your shitty country does.

You live in a shitty country.  But being a shitty person, you just don't know any better.

Now be sure and have a shitty day to match your shitty personality and your shitty nation.

"We gave some folks some shit.  Their own shit."

JRobby's picture

It's DEBT stupid. Write it off, restructure where at all feasable. There's the rub!

"We know that"

"Our dark overlords refuse write offs and realistic restructurings"

Mountainview's picture

The end of debt: Moratorium of debt and all the leeches will have lived for years on the back of productive people.

Snout the First's picture

I have a few EE bonds laying around somewhere. I suppose that makes me a "leech"?

Mountainview's picture

The leeches just have spent the last cent of the money you paid for your EE bond!

Fashy_Farmer8814's picture

It would be a good start. Then begin purging the culture in general

Oracle of Kypseli's picture

Bill, financial freedom is one thing. I don't mind financial shenannigans as I can defend myself to some degree. But I want freedom from government to tell me what to do and how. I want freedom of movement, freedom of carying cash and PM's and freedom from being followed and monitored. 


flaminratzazz's picture

not to mention the freedom to say "fvk you I am out of here" and not get stiffed with an exit tax.

That is nothing but a finiancial iron curtain.. commie shit riight thar..

mkkby's picture

Janis gives him a forum for this tired/worthless rant?  She must be a crack whore.

Stopped reading at his prison population bullshit.  Remove the niggers/spics/muzzies and your prison problem suddenly evaporates.  If you can't be honest about that I can't read anything else you have to say.

Fuck you, Bill.

TuPhat's picture

You didn't miss anything worth reading.  Bill lost it years ago.  He can't even hold a steady job anymore.

thinkmoretalkless's picture

He has been on that corner for awhile. He tries to predict the road ahead by where he has been. It may be more prudent to expect the unexpected.