In his latest Investment outlook, the founder and co-CIO of PIMCO, warned that the US will begin to resemble Greece, before the turn of the next decade if it doesn’t address the fiscal deficit situation.

“Fed would print money to pay for the deficiency, inflation would follow and the dollar would inevitably decline. Bonds would be burned to a crisp and stocks would certainly be singed;only gold and real assets would thrive within the Ring of Fire.”

Gross “Ring of Fire” included Japan, U.K., Spain, Greece and France along with U.S.—the countries which are in the worst public sector deficit/structural fiscal gap situation.

“The U.S., in fact, is a serial offender, an addict whose habit extends beyond weed or cocaine and who frequently pleasures itself with budgetary crystal meth.”

He however added that"Armageddon is not around the corner. I don’t believe in the imminent demise of the U.S. economy and its financial markets. But I’m afraid for them."

While most of Gross’s analysis is accurate and his warnings completely make sense, US cannot be compared to Greece and Spain. These countries have uncompetitive economies, very high unemployment rates and most importantly no control over the monetary policy or the currency.

US is still one of the most competitive economies in the world and that is the reason why investors are willing to lend money to the US government at ultra-low interest rates.

Further with the US dollar as a reserve currency and an independent central bank, US is in a much better position to manage its debt. With an economic recovery and prudent fiscal adjustment policies, US can bring down its debt substantially.

What do you think abouthis views on the US debt situation?