(Bloomberg News) Pacific Investment Management Co.'s Bill Gross said the U.S. will no longer be first destination of global capital in search of safe returns unless the gap between spending and debt is addressed.

Major nonpolitical organizations agree that "when it comes to debt and to the prospects for future debt, the U.S. is no 'clean dirty shirt,'" Gross wrote in his monthly investment outlook posted on the Newport Beach, California-based Pimco's website today. "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."

The International Monetary Fund, the Congressional Budget Office and the Bank of International Settlements compute a "fiscal gap," which is a deficit that must be closed either with spending cuts, tax hikes or a combination of both, which keeps a country's debt/GDP ratio under control, wrote Gross, the manager of the world's biggest bond fund.

"Unless we begin to close this gap, then the inevitable result will be that our debt/gross domestic product ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow and the dollar would inevitably decline," Gross wrote. "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's Ring of Fire includes highly indebted nations such as Spain, Greece, France, the U.K., the U.S. and Japan. Gross has touted his preference for the debt of countries including Germany, Canada, Mexico and Brazil that have a lower fiscal gap to GDP ratio.

Gross cut the proportion of U.S. government and Treasury debt in Pimco's $272 billion Total Return Fund to 21 percent of assets in August, from 33 percent the previous month, according to a report on the company's website last month. Treasuries remained his second biggest holdings after mortgages securities at 50 percent.

The Total Return Fund has gained 11.6 percent in the past year, beating 96 percent of its peers, according to Bloomberg data. It has returned 8.9 percent in the past five years, beating 98 percent of peers.

Emerging markets led global stocks to the fourth monthly gain in September, the longest streak since 2007, handing equity investors better returns than bonds, commodities and the dollar and pushing them ahead for the year.

The MSCI All-Country World Index of equities increased 3.2 percent last month including dividends, bringing its 2012 gain to 13 percent. The Standard & Poor's GSCI Total Return Index of 24 commodities slid 1.4 percent, trimming its yearly advance to 3.5 percent, while the U.S. Dollar Index lost 1.6 percent. Bonds of all types returned 0.31 percent, on average, according to Bank of America Merrill Lynch's Global Broad Market Index.

Treasuries declined 0.34 percent in September, the second consecutive monthly decline, according to Bank of America Merrill Lynch index data.

"The U.S. and its fellow serial abusers have been inhaling debt's methamphetamine crystals for some time now and kicking the habit looks incredibly difficult," Gross wrote. The U.S. has $16 trillion of outstanding debt and owes an additional $60 trillion based on its present value of future liabilities of Social Security, Medicare and Medicaid, he said.

"Altogether, that's a whopping total of 500 percent of GDP," he wrote.

"Well, Armageddon is not around the corner," Gross said. "I don't believe in the imminent demise of the U.S. economy and its financial markets. But I'm afraid for them."

To keep the debt/GDP ratio in the U.S. at a manageable level, Gross recommended cutting spending or raising taxes by 11 percent of GDP over the next five to 10 years.

Even with the approaching the fiscal cliff, the U.S. is still considered the world's "cleanest dirty shirt," with federal debt/GDP ratio less than 100 percent, Aaa/AA+ credit ratings, the world's reserve currency, and its 8 percent of GDP deficit, Gross wrote. Yet, the GDP deficit rises to 11 percent when Social Security and health-care costs are totaled and if the debt problem isn't addressed, the U.S. will begin to resemble Greece before the turn of the next decade, he said.

The fiscal cliff refers to an event in which taxes are set to rise and spending cut by $1.2 trillion if the U.S. Congress fails to agree by Dec. 31 on ways to reduce the deficit.

Pimco, a unit of the Munich-based insurer Allianz SE, managed $1.82 trillion of assets as of June 30.