PIMCO commentary

Here is the latest from PIMCO's Bill Gross. One interesting comment: It is PIMCO’s opinion that central bank purchases in 2004 were the primary force in lowering 10-year Treasury rates from 4.90% to nearly 4.0% in October, while the Fed was in the process of raising short rates by 125 basis points.  On the other hand I keep reading that China's central bank holdings are generally of short duration. I suppose the Japanese can afford to go out further on the yield curve: real interest rates in Japan are close to zero, so a 4.2% yield on 10y Treasurys doesn't look so bad. Also, the $700B in Treasurys they currently hold is only a small component of their national savings.