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<p>[QUOTE=&quot;Morgan1878, post: 1139151, member: 17869&quot;]Excellent post. It takes time, patience and concentration to fully appreciate. In my experience, some of the best insights require early and difficult digging. Here&#039;s a link to Bill Gross&#039;s Investment Outlook for March 2011. For those of you who do not know who he is, he is the world&#039;s most successful bond manager. He is also the CEO at PIMCO, an investment firm that has sidestepped a lot of potholes over the years. Over the last decade, his bond fund has beat over 90% of <b><i>all</i></b> equity funds. As a disclosure, I have been and currently am employed by a Swiss bank as an operations specialist. </p><p><br /></p><p>In Mr. Gross&#039;s monthly piece Investment Outlook, he asks the question &quot;Who will buy Treasuries when the Fed doesn&#039;t&quot;.<a href="http://www.pimco.com/Pages/Two-Bits-Four-Bits-Six-Bits-a-Dollar.aspx" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.pimco.com/Pages/Two-Bits-Four-Bits-Six-Bits-a-Dollar.aspx" rel="nofollow">http://www.pimco.com/Pages/Two-Bits-Four-Bits-Six-Bits-a-Dollar.aspx</a></p><p><br /></p><p>As you mention in your post, Bill Gross sold treasuries in the PIMCO Total Return Fund in February. While this move has not looked prescient in the short term (due to the Japanese Earthquake) it has a high probability of success longer term.</p><p><br /></p><p>Robert Arnott, another of PIMCO&#039;s managers (PIMCO All Asset &amp; All Asset Authority Fund) has published articles and videos during the past recommending buying inflation protection now while it&#039;s cheap.</p><p><br /></p><p>While I agree that higher inflation is on the way, I disagree that &quot;hyperinflation&quot; will occur. Even though inflation will likely get messy, there will be enough common interest among the biggest economies to find a solution since all will be affected.</p><p><br /></p><p>I also disagree that owning gold and silver are the only ways of fighting inflation and decreasing purchasing power. Other ways of doing this include a basket of commodities (grains, oil, base metals, etc) sovereign debt of emerging economies, and bond funds which effectively short the bond market with negative duration during times of rising interest rates. I own some of all of the above (plus others) in a tactical allocation fund where the fund manager will increase or decrease these components based on the long term outlook for inflation.</p><p><br /></p><p>Currently,I feel that my 10% PM position (5% Gold derivatives &amp; 5% Silver Bullion) is enough hard insurance for my portfolio.</p><p><br /></p><p>Although there are storms on the horizon, I expect in the long term that the skies will clear, but it&#039;s still wise to prepare ahead of time.</p><p><br /></p><p>As an old Sufi proverb says &quot;Trust in God, but tie your camel first.&quot;[/QUOTE]</p><p><br /></p>

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