Michael Pento says the world economy is actually in worse shape than we have been led to believe. China and the other emerging market have historic level of debt. The US corporate debt is at historic levels. Corporate profit is based on being able to roll over debt at historically low interest rates. What happens if interest rates rise. The housing market has also been floating on historically low interest rates. What happens it interest rates rise? Today’s housing market will crash.
We have had 2.5 stock buybacks since 2009. Stock buybacks lower the amount of outstanding stock shares. This artificially ra earning per share which causes the stock market to go up. But that increased earnings per share is not based on increased revenue.
FED cannot normalize interest rates without dire consequences. If they normailsed interest rates, with these historic levels of debt a major portion of the GDP will solely go to paying the interest. Michael believes we are heading into a serious recession.
Inflation comes when the markets lose faith in fiat currency. Michael believe thy may start rate hiking rates. They want to raise rates but they are also afraid to raise rates because of the historic levels of debt.
QE doesn’t work. So what will the FED do? Direct cash to people? Ban cash?
The every day person will see a repeat of 2008 only worse.
If you have any fixed income bond fund Michael advises get out as soon as possible.
You will see more unique actions that will shock many people. What happens in an economic depression? Look at history as a guide.
Get a copy of Michael Pento’s book The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market
Visit Michael Pento at PentoPort.com and find out more about Pento Portfolio Strategies. Go to the website to and find out how to subscribe to his weekly podcast.
Listen to the Precious Metals Investing Podcast
You can listen to some of the episodes right here at PreciousMetalsInvesting.com: Precious Metals Investing Podcast
Or even better yet subscribe to the podcast on iTunes here: Subscribe To Precious Metals Investing podcast on iTunes
Android Users can subscribe to the Precious Metals Investing Podcast at Google Play here:
DISCLOSURE: If you purchase items though the links on this site such as the Amazon Links, PreciousMetalsInvesting.com will be paid a commission. The prices charged are the same as they would be if you were to visit the sites directly. Please do your own research regarding the suitability of making purchases from the merchants featured on this site.
The content provided here is for informational purposes only. Investor’s situations vary so make sure you consult with your own financial adviser before making any investment decisions. Not all investments are suitable for all investors. Users agree to hold preciousmetalsinvesting.com, its owner and affiliates, harmless for all information presented on the site. PreciousMetalsInvesting.com presents no warranties. PreciousMetalsInvesting.com is not responsible for any loss of data, financial loss, interruption in services, claims of libel, damages or loss from the use or inability to access PreciousMetalsInvesting.com, any linked content, or the reliance on any information on the site.
The information contained on this site does not constitute investment advice and may be subject to correction, completion and amendment without notice. PreciousMetalsInvesting.com assumes no duty to make any such corrections or updates. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. PreciousMetalsInvesting.com disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result. The information supplied by the experts featured at PreciousMetalsInvesting.com are assumed to be accurate.