Money manager and financial expert Michael Pento says every corner of the globe is in economic trouble. Pento contends, “I think we are going to have a global synchronized collapse amongst the developed world economies: Europe, Japan, the United States and China, and you should be hedging against this market. Don’t forget, we have the most overvalued, most dangerous stock market in the history of the world. . . . Record valuations sit on top of an unprecedented earnings and revenue recession. The only thing we have left is the promise of ZIRP, QE and negative interest rates that don’t work. All they do is inflate asset prices. You should be short the market, and you should be long precious metals.”
Pento, who wrote a book titled “The Coming Bond Market Collapse,” says the global bond market is also in trouble, and recently defaulted Puerto Rican bonds is just the beginning of trouble. Pento explains, “This is a great fact, and you are only going to get this on USAWatchdog.com. We (U.S.) have a debt to GDP ratio that is well over 100%. The total debt of the world is 230% debt to GDP. Global debt is up $60 trillion since 2007, but here’s the data point you are only going to get here. Did you know our debt (U.S.) is growing at 3.44 times GDP? That has never happened before. Go to the . . . Federal Reserve and look it up for yourself. Our debt in the United States is rising at 3.44 times GDP. That is astronomical. That is added to the $19.3 trillion we already have. We are Puerto Rico. We are Japan. All we have is a central bank. If the Fed ever started to raise interest rates, our debt would become unserviceable. Interest rates would go back to double digits very quickly, and the economy would implode. That’s why you are probably not going to get any more interest rate increases in 2016, maybe one at the most, and that’s why the dollar is going lower.”
On Inflation, Pento says, “We have printed enough for this to go hyperbolic. We have plenty of excess reserves. We have already hit our core (Fed) inflation target. We are already up 2.2% year over year. If you want to be honest, we already have the condition much like the 1970’s of stagflation. . . . The Federal Reserve promised us we were on the road to recovery. They said we would be growing at 3% and we are growing at 0%. They said they could raise interest rates and normalize the Fed Funds Rate, and they can’t do it. The dollar index went up to 100 on the belief that this was going to be the case, and it is absolutely not true. That’s how the market is losing faith in the value of the dollar. We are in a condition of stagflation, make no mistake about it.”
Are we also in a recession too? Pento says, “They can do this indefinitely until inflation becomes intractable. In the United States, we are running up on 90 months of 0% interest rates, and what do we have for that? Fourth quarter GDP was 1.4%, and that was bad enough, but first quarter has a zero handle. It was 0.5%. That’s what we get for blowing up the Fed’s balance sheet to $4.5 trillion? That’s what we get for manipulating bond yields down to 0% for 90 months? We are virtually in a recession. If we are not in a recession, we are in a flat line or dead line economy, and it’s zero.
There is free information, data and articles on Michael Pento’s website PentoPort.com. You can also buy a copy of his book “The Coming Bond Market Collapse” by scrolling down to the middle of the home page.
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.