The U.S. could suffer another credit downgrade, similar to the Standard & Poor’s decision to strip the country of its coveted AAA rating in 2011, says Bill Gross, founder of Pimco, manager of the world’s largest bond fund.

The U.S. is running a structural deficit, a deficit a country would post even while running at full capacity, that is seriously jeopardizing the country’s health. Until the government addresses massive liabilities, the country is headed for another downgrade.

Standard & Poor’s currently rates the country at AA, while Moody’s rates the country at AAA.

“Let’s look to the liability structure of the United States. It’s not just $15 trillion in terms of current debt, but it’s probably three to four times that in terms of Medicare and Medicaid and Social Security,” Gross tells CNBC.

“Unless the United States begins to make some inroads, that’s called the structural deficit that the CBO and the IMF basically identified as, perhaps 6 percent to 7 percent to 8 percent greater than any other country other than Japan and the United Kingdom — until we address that structural deficit, yes, we’re headed to…

Read The Full Article

Print Friendly

Do You Own Gold?

Gold prices have been bouncing all over the place for the past few months, but investors have no idea what is coming next? In this new free report, RC Peck, discusses exactly how to invest in gold safely, how to simplify your investments, and how to align yourself with the oldest type of gold company in the world...

If You Own Gold, or Would Like To Profit From Gold, This Report Is For You