Money manager and economist Michael Pento says if you think the worst is over in the stock market, think again. Pento explains, “Now, the valuation of stocks today are the most expensive in history, not around or tied or close. We are now 155% of GDP when you look at the market cap of equities. Stocks have never been more expensive.”
Pento says stocks are going to probably go higher for now, but Pento predicts, “I am going to run contrary to Wall Street, and I am going to tell you that you should see a significant run-up into the news of approved vaccines, new treatments and, of course, more stimulus. We’ve got to borrow more money because $2.4 trillion wasn’t enough. My models . . . say once this vaccine is validated and approved, this is going to be a selling opportunity for me and my investors.”
Pento also thinks that most people will not take the vaccine, including Pento. Also, Pento says, “It’s not going to be a one and done sort of thing,” but something that will have to be given routinely like the annual flu shot. Pento says, “This is going to pave the way for phase two of this reckoning or what I call the ‘Greater Depression.’”
What does the “Greater Depression” look like? Pento says, “Get ready for stagflation, and that’s what I call the ‘Greater Depression.’ That’s when the real chaos begins. . . . You can make an argument that the Fed can fight deflation because it can continue to prop up asset prices. That’s true, and it’s a proven fact, but what does the Fed do when inflation starts to run intractable? When inflation becomes the problem, what can the Fed do? Promise to buy stocks and print more money? What can the Fed do? Print money to buy down interest rates when the economy is in full revolt? When money managers are shorting bonds and driving yields to the moon. No, the only thing they can do is stop printing money and promise to fight inflation. That’s when you are going to get 6,000 on the Dow Jones Industrial average because there’s nothing they can do. The Fed will be rendered impotent.”
Pento suggests that people “get out of all financial products with an adjustable interest rate” and lock in at historically low fixed rates.
In closing, Pento says, “This is the best environment for gold I have ever seen in my career. This is in an environment where debt and deficits are surging. . . . So, debt is exploding, and what does gold like? It likes falling real interest rates. It likes exploding debt, and a little ticker on that is a dollar that’s weakening. That’s why I really like gold.”
Join Greg Hunter of USAWatchdog.com as he goes One-on-One with money manager Michael Pento.
(Correction: Pento says, “It was Moderna not Astra Zeneca that went up intra-day on leaked information. Pento adds, “Both companies are working on Covid 19 vaccines.”)
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.