In an opinion piece in the Financial Times, bond king Bill Gross of PIMCO says that the European Union wants to lure private investors back into the sovereign paper of the region. He advises that such investments are a sucker’s bet. The yields paid out by nations like Spain may seem attractive, but they really are not, Gross argues. Better to put capital into lower-yielding but safer instruments as he has. Gross writes:
The ultimate goal of monetary and fiscal policy in the EU is to re-engage the private sector. The EU needs the private sector as a willing (but not necessarily equal) partner in funding its economy. This often gets lost in the noisy details of all too frequent promises such as the one to defend the euro made by Mr Draghi, European Central Bank president.
Douglas A. McIntyre