Gross is not a man to be trifled with when it comes to investing; highly respected by the likes of Warren Buffett, he is known as the ‘Bond King’.

As of March 31, 2009, PIMCO (Pacific Investment Management Company) in total had over US$756 billion in assets under management. Gross manages PIMCO’s Total Return Fund, the world’s largest mutual fund, which has over $200 billion under management.

Despite the UK’s supposed return to growth (haha) announced yesterday, his assessment of the UK’s financial position in an investment outlook article entitled The Ring of Fire is, frankly, ugly:

Of all of the developed countries, three broad fixed-income observations stand out:

…3) the U.K. is a must to avoid. Its Gilts are resting on a bed of nitroglycerine. High debt with the potential to devalue its currency present high risks for bond investors. In addition, its interest rates are already artificially influenced by accounting standards that at one point last year produced long-term real interest rates of 1/2 % and lower.

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Here is a chart he has produced that shows the problem.