Haircuts, of course, are a popular topic of discussion ever since Cyprus clipped the savings of large depositors in order to recap the banks.

In his latest letter, Bill Gross points argues that there's no way that governments will ever be able to reduce total debt to GDP unless they find creative ways to clip bondholders.

He comes up with four main ways.

(1) Negative Real Interest Rates – “Trimming the Bangs”

During and after World War II most countries with high debt overloads resorted to artificially capping interest rates below the rate of inflation. They