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Michael Pento: Market Meltdown will Intensify Inflation & Ignite a Currency Crisis

Michael Pento returns to the show to discuss the bond market and the possibility of a recession. He believes we should experience an official recession by the end of the year, based on metrics other than just GDP that already show flat or declining activity. The recent actions the Fed took to boost banks by changing the Discount Window is similar to a very quiet bailout. This will allow banks to continue to lend recklessly. It appears Powell doesn’t know what he’s doing. Money supply should be determined by a tangible like gold so it can remain steady and only increase with economic activity.

Inflation is likely to come back and will be treated with the Fed re-targeting it’s inflation goals. This can result in the public losing credibility on the Fed. Furthermore, there is a risk of the U.S. gradually losing reserve currency status. Entitlement programs are estimated to reach 100% of government income by 2040, leading to a freefall economy. The only solution is a depression and a corrective period in which people can understand why it happened. Government will do its best to keep the party going though, which will destroy the dollar’s value.

Everything is looking increasingly like a banana republic and we aren’t headed towards more freedom. The Fed introducing its own cryptocurrency could increase control mechanisms and give it tremendous power. These are very real dangers.

Timestamp References:
0:00 – Introduction
1:08 – Equities & Bond Outlook
6:16 – Fed Policy & Q.E.
9:40 – Japan & Bond Volatility
15:27 – Inflation Outlook & Targets
17:08 – Recession & Equities
20:53 – Deficits & Entitlements
23:32 – Untenable Choices
26:26 – Global Problems
28:15 – Sectors & Outcomes
32:20 – Investing Approach
35:38 – Collapse of Faith
37:18 – Freedoms & CBDCs
42:21 – Wrap Up

Talking Points From This Episode:

  • Recent Fed actions point to an impending recession and have created a quiet bailout of the banking system.
  • Inflation is likely to return and cause the value of the US Dollar to drop.
  • Entitlements will reach 100% of government revenue by 2040 a mathematical impossibility.
  • The Fed introducing a CBDC could give it tremendous power over the population with increased control mechanisms.

Guest Links:

Michael Pento is the President and Founder of Pento Portfolio Strategies, with over 27 years of investment experience. He was the portfolio creator and consultant to Delta/Claymore’s commodity portfolios that raised over $3 billion, distributed through Claymore/Guggenheim’s sales network. He is the author of the book “The Coming Bond Market Collapse” and has a weekly podcast called “The Mid-week Reality Check.”

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