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PIMCO's Gross Predicts 'Better Answers' From Greenspan

Alan Greenspan has agreed to serve as a consultant to PIMCO. On "Street Signs," PIMCO's founder and Chief Investment Officer William Gross talked about the benefits of working with the former Federal Reserve chairman -- and why it's "sort of like getting married."

Allianz's Pacific Investment Management Co., better known as PIMCO, has almost $700 billion under management. Gross -- nicknamed the Bond King by admirers -- told CNBC's Erin Burnett that Greenspan chose to work with PIMCO for "the feedback we can provide him from the standpoint of real-world markets."

The CIO conceded that Greenspan "doesn't have all the answers, and we don't have all the answers" -- but Gross believes that "in combination, we might have better answers."

Greenspan will furnish the investment group with private opinions on Fed rate policy, speaking at quarterly meetings and communicating with the CIO and others "up to twice a week," Gross said. What is PIMCO's current outlook? Gross sees global inflation "creeping slightly" up over the next three to five years -- but still predicts lowering inflation for the U.S., over the the next six to 12 months.

Burnett pressed Gross about a Wall Street Journal article in which he had criticized the ex-Fed chairman's judgement. The PIMCO guru still maintains that Greenspan had "overstated his position at 1%." Gross then laughed, "But if that was a mistake, perhaps we're even with my [2002] Dow 5,000 forecast."