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Bond Villain Targets Britain's Future by John De Roe.
Bill Gross, the world's biggest bond investor might have voted for Obama hnd has some sympathy for Labour because they talk of creating jobs, but he thinks the British economy is in worse shape than anyone is going to admit and is quite willing to take advantage of our vulnerability."

Bond Villain Targets Britain's Future
by John De Roe.
2010-03-12
CREATIVE COMMONS: Attribute, non commercial, no derivs.
KEYWORDS: bond, bonds, trade, britain,finance, economy, debt, quantitative easing,government,interest,debt

You may not have heard of Bill Gross and he may sound an unlikely Bond villain in fact he does not live in the magma chamber of an extinct volcano, use a wheelchair or own a Persian cat. You would be well advised to take him seriously however in spite of the way his silly hat and dodgy moustache make him look rather like the comedy gangster played by Jack Nicholson in the Tim Burton film Mars Attacks. Right now and for the foreseeable future Bill Gross will exert a massive influence on your life and personal prosperity.

Gross is one of the world's leading bond traders with an estimated $1 trillion under management and his pronouncements on the state of the UK economy led to the recent de facto downgrading of the British government credit rating which means we (you, me, our friends, the bloke in the pub and his dear old Mum, everybody) is going to be a bit worse off soon and a lot worse off by next year. Since Gross denounced the attempts of Gordon Brown to "talk up" the recovery, saying Britain had relied too much for too long on financial services and the housing market to prop up our economy as the industrial base was depleted by privatisation, selling off the family silver to foreigners seeking quick profits and the unsupportable levels of spending racked up by Labour's exploding public sector spending our government has to pay a bit more interest to those foreign powers and global financial institutions who underwrite our debts by buying Treasury bonds.

You might think form that Gross is one of the evil financiers who flushed the British economy down the toilet for the sake of short term gain. Not only is that not true, while he took advantage of the dire state our economy is in he did not create the problems. Trading bonds for a profit is how he makes his living and investors expect him to give them a decent return on their money. Away from his dealer desk however Gross would like us to know he is kind to small furry animals, voted for Obambi in the US Presidential election and if he was involved in the forthcoming UK General Election would probably support Labour.

"The people need jobs if the economy is to recover" he says. "The UK will try to get out of 16 tonnes of debt by reflation [low rates and high inflation] or devaluation," Gross says. "The pound is going down and they will have to keep policy rates under 1% for a long, long time because of the housing market, and because many mortgages have a floating rate."

Well there is no reason why as a bond trader he should understand the systemic problems of the British economy or that having been under attack from both Labour and Conservative governments for almost half a century the industrial base is so deleted the only area where Gordon Brown's party could create jobs is in public sector administration and service functions. And this would only serve to increase public spending necessitating the sale of more bonds which would increase the amount of interest British taxpayers must shell out each month to service our debts.

Gross has plenty to say that Gordon Brown (no, forget him) David Cameron and Nick Clegg should take on board but to us his sympathy for Labour suggests only that the bondmeister thinks his business will do better with a Labour government running Britain than with the Conservatives in power or a hung parliament.

"It is useless for the sheep to pass resolutions in favour of vegetarianism so long as the wolf remains of a different opinion." - Dean William Inge.

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