Money Manager Michael Pento is as gloomy as ever in his latest interview with Greg Hunter. Having worked with Peter Schiff for years back in the 2000s this should come as little surprise.
Pento predicted the bond market would ultimately collapse in his 2013 book titled “The Coming Bond Market Collapse.” He says the collapse has started and will get worse quickly. Pento is watching EU inflation and says,
“When the European Central Bank (ECB) announces they are going to take the $60 billion a month of easing and take it to zero, you are going to see a bond market revolt. The free market, whatever is left of it, is going to aggressively start shorting bonds.”
European inflation has touched 2% for the first time in years.
Euro Area Inflation Rate
Michael Pento believes we are in for a 1970s style burst of inflation. But, instead of strong growth and inflation, he is predicting a serious bout of stagflation (weak growth, high inflation) following this next recession.
The last thing the Fed wants and the last thing the Trump Administration wants is a very strong U.S. Dollar.
Pento explains with respect to the Fed’s recent decision to hike that,
“But listen, if you go aggressively here, after sitting on your hands for eight years…”
Pento believes the Trump Administration will not allow the Fed to raise rates quickly or strengthen the Dollar.
Pento continues to believe the economy cannot handle higher rates and that if raised, bond yields will rise and the markets will crash. He explains where he is allocating funds in the last few minutes of the interview.
