My Comments: My habit is to post a blog every Monday about investments and retirement planning. My intent is to help educate you about the forces out there that will influence how your money will grow in the years to come.

Among the writers I’ve come to revere over the years has been Nick Murray. If I could write as well as Nick, I’d have a different career path. But a few days ago, I posted an article that suggested the US Economy Will Suprise Us All. Here’s an article that showed up a few days ago that suggests what I said last Thursday may really happen. (if you have trouble getting through the technical stuff, it’s OK. What Nick Murray is saying is that just because this guy is a bond genious, it doesn’t mean he always knows what he’s talking about.)

By Nick Murray

It will be recalled by anyone with an adult memory that Mr. William Gross, the billionaire manager of the largest bond fund in the universe, strongly suggested not once but twice—in the last months of both the 2000-2002 and 2007-2009 bear markets—that the Dow Jones Industrial Average might fall as far as 5,000. (Today it opens at around 13,300.)

His musings are enshrined forever in the Contrarian Hall of Fame, as they were quite spectacular buy signals. And their timing was very close to perfect.

It will come as no surprise, then, that in his August 2012 “Investment Outlook” piece titled “Cult Figures,” Mr. Gross has, in his own highly idiosyncratic fashion, done it again. That is, I think he has, to the limited extent that I can make any sense of his reasoning. Because where he is not simply wrong — and that covers a lot of territory — Mr. Gross’s logic is well nigh impenetrable, and the only really important question it raises goes not simply unanswered but essentially unaddressed.

It is not necessary to try to parse this screed line by line — one would surely go mad — but his main points seem to be as follows.

(1) The hundred-year real (net of inflation) equity return of 6.6% during a period when GDP growth has only been 3.5% is “an historical freak, a mutation likely never to be seen again as far as we mortals are concerned.” In and of itself, this is a quite remarkable statement, implying as it does two ideas that are manifestly untrue: (a) that the return of equities should not exceed the rate of GDP growth, and (b) that markets are so persistently irrational and inefficient that they have, lo these hundred years past, steadfastly refused to obey the iron law expressed as (a).

This is beyond voodoo economics. This is Monty Python economics.