Billionaire bond maven Bill Gross in a February report says America needs new priorities and blasts a culture that worships money and greed.

Gross, in remarks called Devil's Bargain, blames money managers for failing to allocate capital wisely.

He criticizes a culture that lives off ill-advised financial innovation such as securitization.

In the comments on the website of Pacific Investment Management Co. Gross even points a finger at himself and says he is a member of this rogue's gallery.

I know one thing for sure. This is not God's work -- it has the unmistakable odor of Mammon, says Gross, a founder and co-chief investment officer at PIMCO in Newport Beach, California, where he helps oversee about $1.1 trillion in assets.

Gross says financiers have lost the high ground and the list of financial blow-ups -- from the S&L debacle, the Asian crisis and the demise of Long Term Capital Management and Lehman Brothers to the dot-com bubble and subprime mortgage mess are major sins for the money-changers of Wall Street.

Gross warns that holders of U.S. Treasury debt will earn negative returns because the U.S. Federal Reserve's policy of keeping real interest rates low for an extended period will inflate the price of other, unnamed asset classes.

Investors must analyze other yields and assets, Gross said. He said credit spreads, emerging market returns and currencies with positive and high real interest rates are more attractive than UK gilts or U.S. Treasury bonds.

It is still possible to produce 4 to 5 percent returns from a conservatively positioned bond portfolio -- you just have to do it with a different mix of global assets, he said.

(New York newsroom)

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