Michael Pento: The US Fiscal Cliff Is Here
Tom welcomes back Michael Pento President and Founder of Pento Portfolio Strategies to the program.
Michael says, “We see now a rebound in the virus, the closing of the economies, and a fiscal cliff that is going to be absolutely devastating… The cliff is coming because you can’t print trillions of dollars and borrow trillions every few months. No economy in the history of planet earth has ever been able to do that without destroying its currency and bond market. I don’t think the US will be any different.”
In Europe, they are going to issue trillions in stimulus. Everyone is debauching their currency with the US currently leading the way. It’s hard to get the world reserve currency to crash in that situation, but what is happening is a rush to precious metals. The dollar is being destroyed against hard assets.
The dollar has topped out on a trade-weighted basis. The national debt is now 850% of our revenue. We are an insolvent, bankrupt nation. Nominal interest rates are zero percent across the entire yield curve. You are virtually guaranteed to get minus two percent interest. He says, “The annual deficit is on track to be between four and five trillion dollars. This is Zimbabwe, banana republic level numbers.”
Michael is deeply concerned about the risks of a bifurcated and contested election this fall.
“Spiking deficits, plunging interest rates, you have to own gold.”
Time Stamp References:
1:10 – Economic cliff diving.
5:15 – Moar stimulus coming?
8:55 – Stimulation goes global.
10:35 – Dollar, deficits, printing, and hard assets.
14:25 – How he positions with gold assets.
16:50 – Silvers dual components.
18:55 – Election concerns and government stability.
Talking Points From This Episode:
• Falling off the fiscal cliff.
• Global debasing of currencies and insolvency.
• Equities are massively over-extended.
• Risks of a contested election.
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.”