Gross is the Chief Investment Officer at PIMCO and a recognized bond guru. Here are some of his recent thoughts:

Over the next three to five years, our secular outlook suggests that global inflation, and certainly U.S. inflation, will accelerate mildly for a number of reasons. We also suggest that global growth continues rather strongly at a 4% to 5% pace, which is typical of what we’re experiencing now.

Good news for Maui property owners.

we’ve raised our forecast range for global interest rates, moving the range for 10-year U.S. Treasuries to 4.0-6.5% versus last year’s forecast range of 4.0-5.5%, for instance, which is sort of indicative of how we see the bond markets in general.

Not good for Maui property owners, but probably inevitable given current growth expectations. Gross then disclosed what we find a very insightful point of view:

[T]he race is on to be like Yale and Harvard [in terms of investment strategies]. And that to us suggests that purchases of safe, low-yielding assets—U.S. Treasuries, German bunds and other bonds—are likely to decline and flows into commodities and companies and equity-like types of investments will likely increase. We’re not talking about a major overnight shift but at the margin.Because of that, in addition to higher inflation, we sense a mild upward shift in what we’ve called the “subsidized yields” of global bond markets. The extent of the subsidy is difficult to prove, but one of the charts we included in the secular Investment Outlook suggests that global yields are and have been subsidized by as much as 50 to 75 basis points in terms of lower yields, based upon the willingness of the central banks to buy that safe U.S. Treasury bond.

We think this is a sound point of view and means that investors are seeking riskier investments.. This may mean higher interest rates going forward, but also likely means more rapid wealth creation overall. Good news for Maui property owners.