Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said governments may turn to financial repression and various forms of quantitative easing to inflate asset values as equities fail to match historical returns.

The so-called Siegel Constant, which purports to show a long-term history of history of inflation-adjusted equity real returns of 6.6 percent since 1912, may be a “historical freak” unlikely to be seen again, presuming a 2 percent return for bonds and 4 percent nominal returns for stocks, which in a diversified portfolio produces a nominal return of 3 percent and inflation-adjusted returns near zero, Gross said in his monthly investment outlook posted on the Newport Beach, California-based company’s website.

Since private pension funds, government budgets and household savings balances often assume a minimum 7 percent to 8 percent minimum annual appreciation, policy makers emulating historical patterns may be tempted to inflate their way “out of the corner,” even though inflation doesn’t create true wealth and doesn’t fairly distribute pain and benefits across society, Gross wrote.

“Unfair though it may be, an investor should continue to expect an attempted inflationary solution in all almost all developed economies over the next few years and even decades,” Gross wrote. “The cult of equity may be dying, but the cult of inflation may have only just begun.”