By Greg Hunter’s USAWatchdog.com
Analyst and stock trader Gregory Mannarino says the market meltdown this week was caused by the Fed and weak economy. Mannarino says, “We understand there is a dynamic that has been changing here in the market with regard to the Fed’s purchasing mortgage-backed securities and bonds. This has rattled the emerging markets. They’re having problems with their currencies . . . The Federal Reserve has created an environment of distortions. By them pulling back some of this liquidity from the global economy, they’ve caused problems in these emerging markets, and this is being done on purpose.” What is the Fed trying to accomplish by destabilizing emerging market countries? Mannarino claims, “So, by rattling the emerging markets here, they are going to force investors into U.S. equities and into the U.S. bond market. It’s sort of a backdoor stimulus. . . . This just keeps the party going. That’s all this is.”
This may work in the short term, but it is not long term bullish for the markets. Mannarino warns, “We have this issue with the U.S. economy. They have been force feeding us nonsense . . . that we are in some kind of recovery. . . . This ISM number we got (Institute of Supply Management), we have not seen a pullback like this since 1980. It rattled the market. . . . We’re also getting mediocre earnings reports. We got unemployment numbers that are not good. So, this is spooking the market.” Looking at the big picture of the global economy, Mannarino goes on to say, “I am still a bull here in regards to the U.S. equity markets, but we all know where this is going. This is going to end terribly at some point. A complete financial meltdown is happening. You can see this already how the Federal Reserve has distorted this beyond the point of ridiculousness. Now, they are forcing the emerging market investor to look to the U.S. equity markets. At some point, people are going to see this whole thing is not sustainable. We are going to have a crisis of currency, a crisis of debt that is going to rock the core of the earth—period.”
This is a confidence game according to Mannarino. He says, “This is all about perception, not reality. If we were really in some type of a recovery, would we be talking about extending unemployment benefits for people? Would we be talking about more stimulus? Of course not, because there is no recovery. This is just smoke and mirrors across the board.” Don’t expect the market to plunge just yet because Mannarino says, “The Fed is counting on turmoil in the emerging markets to drive money into the U.S. market to keep the system propped up.”
Mannarino contends what you are seeing now is just a short term trade. In the longer term, Mannarino predicts, “Without a doubt, this is going to blow up. . . . I’ve been saying this for years now–we are headed for a pan global financial cataclysm. That’s a fact.” So, how does Mannarino plan to protect himself from this surefire coming calamity? Mannarino says, “I pull my gains out of the market, and I turn them into hard assets. I am the biggest precious metals bull out here. I can’t imagine a better place to be than in gold or silver, especially silver.”
Join Greg Hunter as he goes One-on-One with Gregory Mannarino of TradersChoice.net.
After the Interview:
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