etc which means america loses its sovereignty as we've been saying all along and bill gross is absolutely correct the mathematics don't add up there's no way you can do any cuts in any combination that will create growth to pay off these debts and this is what we mean when we say america is losing its sovereignty not only have we been talking about thought slax but he talks about financial repression and this is another topic that we discussed over and over and he mentions that what's happened now is that this negative real email so that's a point nine three percent now if you take the eel down a ten year treasury bond to get the c.p.i. back it gives you the real rate of return and right now it's negative point nine three percent he calls this financial repression and so he's selling some of his treasury bonds or at least increasing the percentage of his bonds he holds over seas including canada mexico brazil and germany that's right negative real race you've got to subtract the c.p.i. from what they offer down there at the federal reserve bank and end up with a negative number which is t

the first headline knocks gross debt deal fails to make significant dent in deficit so this is bill gross fund manager for pimco the largest bond fund in the world he says in addition to an existing nearly ten trillion dollars of outstanding treasury debt the u.s. has it near unfathomable sixty six trillion a future liabilities at present cost so he's saying that the debt deal that's been done does nothing to address it there still needs to be trillions more in cuts but also taxes which of course have not been mentioned on our right the debt is expanding and the attempt to cut the debt means by definition cutting parts of the economy that would be generating revenue and tax revenue to pay off debt so it's an impossible situation where the fact of the ultimate solution being that huge debt write off muster courage is not being taken and this is really interesting because ultimately barack obama is shirking his response of. to address the real problem so what is going to happen is this problem is going to be addressed by a global banking situation like the i.m.f. etc which means america los

so this is the dynamics of a collapsing debt bubble is these negative real rates of return that bill gross talks about and it's surprising that now it's even in germany so that's a huge pent up buying interest in european markets in. the german market now will be flooding into the gold bullion market and taking gold to incredible new highs against the euro well yes max you kind of jumped the gun here for me but i was going to say gas and enhanced and there he was tweeting that germany hit negative real rates as well for the first time since one nine hundred fifty seven part of it is the volatility happens things happen so fast in this financial include economic meltdown so here was bill gross being interviewed it was a tuesday morning and he's saying he was buying germany because there were real rates of return there but within a few hours of this article appearing bloomberg and harrison is reporting germany is just going to give right. this is a trend that wall spread around the world as the crisis really becomes more pronounced around the world nobody in any of the g eight or g twenty co

bill gross of us was saying that us is actually an old creaking we greeks because if you add all the unfunded liabilities to the national debt figure i mean the national debt figure. isn't really what this is really about but really the unfunded liabilities are the so-called fiscal devil that's two hundred and two trillion us dollar so in many ways that's worse than greece the budget deficit is very small as the same as crazy of ten point eight percent budget deficit in the eurozone was formed or not that's a eurozone is any better i mean they're just they're blowing up right now to all of you have seen again pressure on greek and pigs government bonds and even germany and france are increasingly looking shape on development as well but just as a reference on the eurozone was upon there was a limit of three percent or budget deficit as a percentage of g.d.p. that is normally considered as a maximum sustainable so the u.s. is now at ten point eight percent clearly as we have been warning they are beyond the point of no return and we don't really see that they could solve the problem i

at global markets and influencing factors with steve rattner, nouri al rabinny, bill sahlman and bill gross. >> what they're worried about today is slow growth, recession and risk. and e fact is, over the last couple of years we put a lot of stimulus in the economy, we got the economy growing again but it's like pumping air into a balloon. >> rose: you think there's a real threat of a double-dip recession in. >> i think there is at this point at least a 50% probability. >> i think you have to think about a new kind of manufacturing. i think a lot of people are going to start to move manufacturing back here. >> today we have global economies in the developed world that were based on expectations of 2% to 3% growth and now we're looking at 0 or perhaps something less. and so this stability that was is leading to instability in the future based upon slower economic growth and/or recession and therefore declining profits. >> rose: a look at markets and the defining factors of our economic future next. ♪ ♪ [ male announcer ] if you've had a coke in the last 40 years, you've played a part in buil

to some extent we haven't really seen a sell over there yet but that's why for investors now as bill gross the story it's absolutely now the time to get out and the long term balance will be not be had and even if anything when we would even short it because you're still in the dollar and the dollar made us suffer through the devaluation so no i don't really see that the market isn't getting adjusted to one model but that's going to come now no no graduate you want to jump in there jeff as well you want to do the bill gross the. yeah i mean joe for shit i'm going to be selling bonds as mitt is drastically misunderstood everyone saying oh he's selling bonds because he thinks the government is going bankrupt or what not that's actually not what's going on he's selling bonds because he anticipates the end of q e two essentially. the fed goes back to normal zero interest rates of sort of negative interest rates that's essentially a rate hike and historically that would be a good reason to sell bonds if you actually look at what his partner mohamed el area is saying elsewhere is like of the ten

but that's going to come now ok no no no you want to jump in there jeff i saw you want to do the bill gross . i mean rose joe first in one of your selling bonds is. drastically misunderstood everyone saying oh he's selling bonds because he thinks the government is going bankrupt or what not that's actually know what's going on because he anticipates the end of q e two essentially. the fed goes back to normal zero interest rates and sort of negative interest rates that's essentially a rate hike and historically that would be a good reason to sell bonds if you're to look at. what is partner mohamed illyrian is saying elsewhere is like of the ten year yield got a bit higher we pry actually buy bonds again so this is another thing people look at his move and start to freak out and say oh this means that he thinks the government is going bankrupt is actually what you really mean. to you but i'm saying is this rising so how do you possibly seeing a you even say raw interest rates are going to be on the rise how do you possibly saying this the estate numbers are high interest rates are going to be

before the fed does anything, they talk to bill gross. he thinks the increase in interest rates could be between a quarter of a percent and half a percent. and that is the borrowing cost for the u.s. government and also, wolf, the borrowing cost for consumers to varying degrees it would affect mortgages, credit cards, all toe loans, all of those to varying degrees. over time that does add up. it will cost us more to borrow every time we go to the bank. that's something important to consider. but i will say this. if you look at interest rates, since the late 1970s, and a lot of people remember buying money in the '80s, we're now at 2 3/4% over ten years. the u.s. is still the best place to put your money out there in the world compared to anywhere el. >> that's an excellent point. despite the $1 trillion spending cut that's projected as part of this deal over the next ten year, you know, given the amount of money involved, does it really move the needle all that will much? >> no, wolf, that's the scary thing. it really doesn't. when you're

we ask bond guru bill gross of pimco. it's "nightly business report" for monday, august 1. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. after weeks of bickering, it will be another busy night in washington, susie. the house is debating the measure now and is expected to start voting any moment now. >> susie: tom, if the bill passes the house as expected, the measure heads to a senate vote tonight and could land on the president's desk as early as tomorrow morning. >> tom: the bill calls for raising the debt ceiling by $2.4 trillion by the end of next year and cutting nearly $2.5 trillion dollars in government spending in two steps. washington bureau chief darren gersh joins us from washington with the latest. darren? >> reporter: tom, this is going the senate is expected to follow as soon as tonight or tomorrow. we're going down to the wire.

bill gross, who manages the world's largest bond fund, believes recession is likely. as quote, markets recognize the impotency of policymakers. b.n.p. paribas' bricklin dwyer is also in the recession camp putting the odds at about 70%. >> over the past week, we've become increasingly worried. the recent data has pointed to a sharper slowdown in terms of consumer confidence and manufacturing confidence, as well as the other indicators which generally show the economy has not come out of the recession as far as we would have liked. >> reporter: the main problem is that consumer spending is about half as strong as it is during a normal recovery and it's that spending that makes up 70% of economic growth. the u.s. consumer is not the only problem. there are worries about weakening global demand due to japan's tragedy. china's fiscal tightening and the european banking crisis. there may also be psychological reasons that make consumers and businesses feel uneasy. from the federal reserve to the capitol to the whitehouse to the european union, many americans have lost confi

bugs so this is the fight between bit paper and little yes and as we pointed out at the time even bill gross who who operates the largest bond fund in the world a paper bug he mentioned exactly that that the c.m.e. had done that intentionally to drive the price of silver down that's right and all it has done is it's radicalized more solver buyers like the silver liberation army for example they're simply buying more physical sohmer so the base upon which this rally is being built is widening and if you get a wider base the ultimate price target expense extends to a higher objective and so another headline regarding commodities exchanging on various exchanges around the world that has been overlooked during this diversion of this fake battle over the debt ceiling totally fake battle changes nothing in the genuine economy of america or the world another city headline city's top economist says the water market will soon clips oil so this is well known boyd are and he says that he expects to see a globally integrated market for fresh water within twenty five to thirty years once the spot markets

etc it is bill gross is absolutely correct the mathematics don't add up there's no way you can do any cuts in any combination that will create growth to pay off these debts and this is what we mean when we say america is losing its sovereignty. to syria now that i have been for a time government protesters across the country gunfire and explosions have been reported in the city of. more than three hundred people have been killed in the past week of bloodiest in the five month uprising against president assad's rule bahrain kuwait and saudi arabia have called them bastards from syria adding to the international condemnation of the crackdown on protesters and patrick from the online political magazine spike in london says bashar al assad is apparently at a loss as to how to deal with the situation. if assad is serious about promising democracy and sweeping constitutional reforms so he has promised then clamping down on freedom of speech and freedom of expression which is the cornerstone of any democracy is not sending out a message to the syrian people that he can be taken seriously or