Search results for Michael pento

Michael Pento: “These Are The Most Dangerous Markets I’ve Ever Witnessed”

In this week’s podcast, Michael Pento, fund manager and author of The Coming Bond Bubble Collapse, explains how the United States is fast approaching the end stage of the biggest asset bubble in history. He describes how the bursting of this bubble will cause a massive interest rate shock that will send the US consumer economy and the US government—pumped up by massive Treasury debt—into bankruptcy, an event that will send shockwaves throughout the global economy:

These are the most dangerous markets I have ever witnessed in my entire life, and I’ve been investing for over 25 years. Let’s go over some numbers to let you know exactly how tenuous this bubble is. Its membrane has been stretched so wide and so tight that it’s about to burst, and any semblance of even maybe a little sharp object, something even a hemophiliac wouldn’t be afraid of, sends the market careening downward.

Global central bank balance sheets are up from $6 trillion in 2007 to $21 trillion today and they are still being expanded at the pace of $200 billion each and every month. What’s happening is that the robotraders, the algorithms, the frontrunners on Wall Street and around the world are just gaming the system, looking for the next increase in central bank credit to take their collateral to the ECB or to the Bank of Japan or to the Fed and buy more stocks and bonds.

That’s the game we’re playing. Even a hint that it might someday end sends the entire investment community scampering for the door; and that door is very, very narrow and can only fit a few people through it. So let’s go through a couple of more data points to emphasize just how big this bond bubble is and why it’s so important.

So the European Central Bank is buying corporate bonds. I hope everybody knows that. So much that there’s now 30% of investment-grade debt in Europe trading with a negative yield. This is not sovereign debt (as asinine as it is to ever be able as a sovereign nation to issue debt and get paid to do so). Investment grade bonds in Europe now trade with a negative yield.

The Bank of Japan owns 50% of all Japanese government bonds, JGBs.

About 25 percent (and this number vacillates between days where the German tenure goes north or south of the flat line) of global sovereign debt trades with a negative yield.

So what happened on September 8th? Last Thursday, Mario Draghi came out and gave a press conference after leaving rates unchanged in the European Union. The audience was asking questions like: Did you discuss helicopter money? No, we really didn’t discuss it. Did you discuss extending the QE program beyond March of 2017? No, we didn’t discuss extending the 80 billion purchases of assets beyond March. There was a stirring in the audience, the reporters were beside themselves. They couldn’t believe that Mario Draghi, even though he didn’t even hint about stopping QE, he didn’t extend its duration or its quantity. That sent markets cratering. The Dow fell 400 points. The U.S. 10-year yield jumped from 1.52% to 1.68% in one day.

Now, the market had a bounce back the next day, then was down again more than 200 points on the Dow. So you can tell, anybody with any objective, critical, independent mind can tell this is an unsustainable, very ephemeral rally in stocks that has occurred since 2009. And when the bond market breaks, when that bubble bursts, it will wipe out every asset — everything will collapse together — because everything is geared off of that so-called ‘risk free’ rate of return.

If your risk free rate of return has been warped down to 0% for 96 months, then everything — and I mean diamonds, sports cars, mutual funds, municipal bonds, fixed income, REITs, collateralized loan obligations, stocks, bonds, everything, even commodities — will collapse in tandem along with the bond bubble burst.

Click here for the interview.

How Central Bankers reshaped the world economy following the 2008 economic crisis

Another informed view explaining the intentionally precarious nature of the global financial system.
The intent of this situation is the planned breakdown of the current fiat monetary system and its likely replacement with a global fiat currency, most likely a cryptocurrency based upon the IMF’s “Special Drawing Right (SDR). Also this article
Many informed commentators have warned us:
 
To name a few. And now Naomi Prins in her new book Collusion: How Central Bankers Rigged the World.
This from her bio page:
Nomi Prins is a renowned journalist, former international investment banker, author and speaker. Her new book, Collusion: How Central Bankers Rigged the World, explores the recent rise of the role of central banks in the global financial and economic hierarchy. Her last book, All the Presidents’ Bankers, is a groundbreaking narrative about the relationships of presidents to key bankers over the past century and how they impacted domestic and foreign policy. Her other books include a historical novel about the 1929 crash, Black Tuesday, and the hard-hitting expose It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street (Wiley,2009/2010). She is also the author of http://www.amazon.com/Other-Peoples-Money-Corporate-Mugging/dp/1595580638/ref=pd_sim_b_1 (The New Press, 2004) chosen as a Best Book of 2004 by The Economist, Barron’s and Library Journal.
 
End of quote.
The only question is: “Have you prepared for what is coming?
Because there is simply no doubt this is on our doorstep. And the evidence is it will begin later this year. In ways, it has already begun, though it’s not visible to the public (of course not!!!)
If you are not prepared, in my opinion, you need to get very proactive because time is running out.
These experts vary in what actions they recommend to prepare. The only one they all agree on is precious metals that you hold yourself. And, in my opinion, given the inflated real estate values almost globally, real estate is NOT one of the things to be holding beyond, perhaps your own home, unless it’s your core source of income, and even then you need to look very closely at your position.
It’s also a time when the elite harvest the little people. Every economic cycle has this, but few are of the extent of 1929-1937 or so. In my opinion, this one could exceed that.
Do not tell me I didn’t try and warn you.
Kind Regards,
Richard
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