MIKE

Posts Tagged ‘Michael Pento’

by Eric King
September 17, 2011
King World News

With continued volatility in the gold market and identities of individuals being named in the JP Morgan silver manipulation lawsuit, today King World News interviewed Michael Pento, President of Pento Portfolio Strategies. Pento started off discussing the economy and ended with his thoughts on the JP Morgan silver situation. Let’s begin with Pento’s comments on the economy, “The stagflation condition that maligns the U.S. is worsening on a daily basis. Last week we saw an increase in initial jobless claims and an increase in the YOY rate of Consumer Price Inflation. Jobless claims increased by 11k to a level of 428k and the CPI jumped to 3.8% over the last 12 months.”

Michael Pento continues:

“Remarkable, instead of taking steps to address our inflation problem, the Federal Reserve has locked in their dollar-killing zero percent interest rate for another two years, and Chicago Fed President Charles Evans is on record saying the target rate of inflation needs to be raised!

Our debt and deficits continue to pile up and has caused John B. Chambers, Chairman of Standard & Poor’s Sovereign Debt Rating Committee, to warn last Thursday that there is a one in three chance of another U.S. debt downgrade. That’s because the single-celled organisms in both parties that run our government have hatched a scheme to cut just about $20 billion in spending, but want to add $450 billion.

The bottom line is that the U.S. will have added $1.3 trillion in debt during fiscal 2011 alone. China is watching and waiting to pounce on European and U.S. assets to pick up those pieces after the collapse of our dollar and bond market occurs.

“To top off everything, last week the follicle challenged Donald Trump accepted gold as a lease deposit worth about $200,000 from Michael Haynes, chief executive of precious metals dealer APMEX. But Trump has the payment method for this transaction 100% correct.

The faith in the purchasing power of the U.S. dollar is falling about as fast as our crumbling GDP. We must, as a country, defend the middle class by promoting savings and investment. We can only do this by balancing our budget and fighting inflation. Unfortunately, we are doing everything to kill whatever value is left in our currency and our economy.

As a side note, if the allegations that JP Morgan has engaged in silver manipulation are proven correct, as discussed in the King World News piece, the conspiracy theorists will have been exonerated. This will vindicate those who believed for so many years that prices in the silver market were being artificially depressed. Chalk one up for the hard money advocates as this is a big blow to the wire houses who have been hopelessly defending their silver short positions.”

Read the entire article HERE.

Submitted by Tyler Durden on 08/31/2010

As part of the Fed’s latest QE iteration, it has already been made clear that despite initial disclosures that the Fed would stay in the 2-10 Year bound of Treasurys, Ben Bernanke is now also gobbling up the very long end of the curve. For all those who are, therefore, still confused why bonds continue to surge to record levels, don’t be: when there is a guaranteed bidder just below you in the face of the Fed, and who you can turn around and sell to at will, there is no pricing risk. The problem, from a bigger stand point, is what happens when the Fed is actively buying up 30 Year bonds with impunity and the much desired (by the Fed) inflation still does not appear? Well, the Fed then, in Michael Pento’s opinion, will begin to purchase stocks and real estate. And as all those who enjoy comparing the US to Japan can attest, outright purchases of securities by the Japanese government is a long-honored tradition in the ongoing fight with deflation in Japan. However, and as the recent BOJ (lack of) intervention demonstrated, Japan never could do anything with the required resolve, and bidding up one stock here and there would never achieve anything. Which is why in this interview with Eric King, Michael Pento makes the case that as opposed to the occasional market intervention via the President’s Working Group, Bernanke will soon make stock purchases an outright policy of the Federal Reserve as its last ditch attempt to engender inflation before the hundreds of billions of Commercial Real Estate and other bank debt start maturing in 2011/2012. Bernanke is running out of time and he knows it. And once the Fed becomes the bidder of last resort in stocks, all bets are off, as the Central Bank will become the defacto only market in virtually every risky category. And the only safe vehicle, once the market then begins to price in Fed driven asset-price hyperinflation, will be gold.

Pento also provides some perspectives on the Fed’s balance sheet, which he anticipates will expand in a “great fashion”, but a much bigger concern to the recent Euro Pacific Capital addition, is the possible surge in M2: “That base money can expand, M2 which is currently running around 8.5 trillion all the way up to nearly 25 to 30 trillion dollars of money supply and that’s enough obviously to send prices through the roof.” All Bernanke needs to do is light the “alternative asset purchasing” match and all those who wonder what left field hyperinflation could come out of, will get their answer.

Of course, it wouldn’t be a Pento interview without a requisite smack-down, in this case of Dennis Gartman, whose call to sell gold denominated in euros at the very bottom of the recent gold correction needs no further commentary: EUR-denom gold has jumped well over 10% since Gartman said to get out. Pento adds the following: “There is so much misinformation out there, Dennis Gartman was out there saying gold has lost its inflation hedging properties: this is just ludicrous and insane. I can tell you that gold will never lose its inflation lure, and that’s precisely why I’ve stepped up my purchases of gold., I see what the monetary base is doing, I can clearly see Bernanke’s next step to vastly increase the size of the balance sheet and the monetary base. So for me, it’s 100% an inflation hedge.”

Read the entire article HERE.