USA Watchdog – Worldwide Credit Bubble Bursting Now-Michael Pento

4Greg Hunter’s

Analyst/money manager Michael Pento says the Fed plans on raising interest rates multiple times. Pento explains, “The Fed isn’t going to do a one-and-done rate hike scenario like Wall Street would like you to believe. The Fed publishes . . . where they think the Fed Funds Rate . . . will be at a certain point in time. . . . At the end of next year, the median ‘dot plot’ is 1.5% on the overnight lending rate. So, the Fed is not going to raise one time and retire and go home, and that is not even the most important point. The most important point is we have reached a point where we are entering into a global recession, and this global recession is going to occur even if the Fed did not raise interest rates more than one time. It’s happening now.”

Pento, who wrote the 2013 book “The Coming Bond Market Collapse,” says almost every country in the world is in deep financial trouble and contends, “You’re seeing the bursting of this worldwide credit bubble, and the first cracks are appearing in junk debt. . . . Global debt is up to $230 trillion. That is a $60 trillion increase since the Great Recession. All of this debt has been issued at artificially low prices. . . . The global economy has never been more addicted to 0% interest rates ever before in the history of economics or the history of the world. You are starting to see that crack, and that crack is going to occur . . . all the metrics I look at are screaming recession outside of the Fed’s rate hike.”

So, if the global economy is slowing down no matter what, why raise interest rates? Pento says, “Yellen has boxed herself into a corner . . . she wants to make people confident in the economy. She wants to fulfill that confidence by going off zero. . . . They are going off zero to maintain the illusion of credibility.”

If the global economy tanks in 2016, what will Fed Head Janet Yellen do then? Pento contends, “It doesn’t change the intractable motion towards a recession. So, she’s going to have to take back that interest rate hike. She goes back into QE sometime in 2016. . . . I think the U.S. dollar is really in jeopardy here because the ‘dot plots’ say we are going to be at 1.5%, and I don’t think we ever get there without completely flattening out the yield curve and sending the U.S. economy into a depression. If that’s the case, how can the U.S. dollar maintain where it is? I think it rolls over, and I think it rolls over hard. . . .The U.S. dollar has been king for the past several years. I think that all comes crashing down, and gold will once again come to the floor . . . As far as I know, God is not making any more elements that are beautiful, rare and indestructible. So, gold is real and honest money, and it will be once again thought of as that even from the ‘robo’ day traders.”

Join Greg Hunter as he goes One-on-One with Michael Pento of Pento Portfolio Strategies.

(There is much more in the video interview.)

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