Tom welcomes back Michael Pento, President and Founder of Pento Portfolio Strategies, to the show.
Michael begins by focusing on the current state of the US financial system and potential risks ahead. With the bank term funding program expiring nex…
Tom welcomes back Michael Pento, President and Founder of Pento Portfolio Strategies, to the show.
Michael begins by focusing on the current state of the US financial system and potential risks ahead. With the bank term funding program expiring next week, there may be stress in the banking system as banks will have to repay credit received and take back their assets. Other risks include rising unemployment rates, impacting various loan markets, and indicators such as a contraction in the manufacturing sector for 16 months, an inverted yield curve, and increasing bankruptcies. Michael suggests that the economy is unhealthy and unbalanced, favoring the wealthy while harming the middle class and lower-income individuals.
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Michael feels there's potential for another liquidity crisis in the US banking system. While the Fed could implement measures like another bank term funding program, it would be problematic amid high inflation, potentially leading to higher long-term interest rates, increased borrowing costs, and a sovereign debt crisis. He argues that options for addressing a liquidity crisis are limited and any measures taken may have unintended consequences.
Mr. Pento believes we're in a bubble economy due to excessive money printing and low interest rates. Pento expects inflation to continue to rise, leading to a recession and potentially a serious bear market for stocks.
Pento discusses the relationship between gold and Bitcoin, suggesting that Wall Street and the general public have been more focused on Bitcoin due to its higher profile and influence of sponsors in financial media. He believes gold is a more reliable store of value and better hedge against inflation than Bitcoin. Pento advises investors to pay attention to economic cyc..
