Billionaire bond manager Bill Gross has claimed that people may be better off investing in bitcoin and gold rather than shares, due to the current low interest rate policies of global banks.

Gross, who manages the $1.5 billion Janus Global Unconstrained Bond Fund, made the claim in an October investment outlook released to investors of the group Tuesday.

He argued that the historically low-interest rates offered by the likes of the Federal Reserve are hindering global economies by propping up so-called “zombie” corporations, that is, indebted companies that are able to repay the interest on its debts but not repay the principal, and as a consequence is inhibiting “creative destruction.”

Those low, or in some cases zero interest rates will also see investors looking for alternative investment opportunities. “At some point investors — leery and indeed weary of receiving negative or near zero returns on their money, may at the margin desert the standard financial complex, for higher returning or better yet, less risky alternatives,” he noted.

“Bitcoin and privately agreed upon blockchain technologies amongst a small set of global banks are just a few examples of attempts to stabilize the value of their current assets in future purchasing power terms … Gold would be another example — historic relic that it is. In any case, the current system is beginning to be challenged.”

Casino

Gross didn’t mince his words when it comes to describing current global monetary policy, comparing central banks to casinos.

“Our financial markets have become a Vegas/Macau/Monte Carlo casino, wagering that an unlimited supply of credit generated by central banks can successfully reflate global economies and reinvigorate nominal GDP growth to lower but acceptable norms in today’s highly levered world.

“Central bankers have fostered a casino-like atmosphere where savers/investors are presented with a Hobson’s choice, or perhaps a more damaging ‘Sophie’s Choice’ of participating (or not) in markets previously beyond prior imagination,” Gross added. “Investors/savers are now scrappin’ like mongrel dogs for tidbits of return at the zero bound. This cannot end well.”

Potentially those “tidbits of return” could well see a renewed interest in bitcoin investing in the months and years ahead.

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