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Pento Portfolio Strategies President Michael Pento on the economy’s outlook and its impact on investors’ strategies.
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I have to do is look at year to date charts or just go back a year and you can see.
It's a rally it looks very good but many bullish investors out there are calling for continued slow yet upward economic recovery.
My next guest not so much she's feeling less optimistic saying that we are flirting with recession and that the inevitability of rising interest rates will lead to.
A stock market's crash.
I don't want to see.
-- the Caribbean at what she really mean it Michael Michael -- -- I never -- for work strategy.
Never well that's probably where were you know -- -- -- up and down.
OK so you said we're flirting with a recession last -- Quarter if I'm recording you able the last quarter's GDP print was negative right you need one more for the and -- article in an official recycled -- are that far away we're not that far away with that we had.
The bush -- tax rates.
They went away okay most of course at least some of them right payroll taxes went up and now we're facing higher interest rates.
And I think they can go to three and a half percent because that's where they -- in late 2010.
Before we had the European bond price are you talking about what three and a half percent on the US -- ten here okay that's our benchmark right now okay wanted to be clear on that right now where exactly it to the two point 01.
A complex problem if you -- -- -- After I did that I -- -- nowadays -- jump retained its over the petty.
We sit here human -- -- -- significant because you're -- -- with our.
Yeah it is what it is the feds involved central governments are weakening at the central banks are weakening their currency.
How is that they have the money that a good thing it's not but I don't care what's what -- -- by the -- you can never.
-- balance your payments by wrecking your currency.
You look at anything from the plaza accord what happened 200220052008.
Which I got on 09 -- Increased your exports by wrecking your currency because everything pricing your currency goes up you can forget about that but let's be honest we aren't the middle of a currency war -- -- -- -- they -- cow in Japan.
What are they doing over there with their inflation targets Bernanke 85 billion dollars of monetary purchases.
Per month you -- debt problem you are not wrong.
Then again you are not -- teach me how to make money energy what is out there short bonds okay that's one thing went -- -- assured TB TT BF a cut to great ETS anybody combined TPT and TV FR the art of funds where you can't get -- some of the double short TD TD TB TTP -- is that -- -- short seller short the Lehman twenty year plus stretch so so as.
As these things start to weaken you make double your money.
Yes we like -- PDF PDF is just straight just straight on the morning good enough and I also like energy and -- long energy by the way I think.
Even though the economy is heading for -- train wreck precisely because this -- issues economies built on.
Trillion dollar deficits six trillion dollars worth by the way since the Great Recession began December 2007.
It's built on massive deficits as I just said and 0% interest rates since since 2008.
And what do we have to show for that and almost 8% unemployment rate you can -- me by saying seven point nine and get back if you want to.
A hopeful America -- and you can and you see we had a negative GDP -- what does that getting us what -- Scott you -- properties that -- to show us what you thought was an excellent one vs fictitious but let's go with gold -- argue with long gold at this gold stocks are down forty we believe -- -- down 40% in the last eighteen months yes we have a significant position about 15%.
Intent the portfolio strategies who still positive on the fealty here is that best -- -- plants and if you had 85 billion dollars worth per month -- fed debt monetization you have to own some gold yeah.
You actually have to own some gold and once we hit three and half percent on the ten year.
That's gonna storm that's already fragile economy and then Bernanke's got a decision to make what is the -- -- -- -- -- sit on his hands.
And watch a recession ravaged the economy once again or -- can increase.
The amount of his monthly monetary -- what's your call I think it's I think QE five is right around the corner -- -- Then why -- can't say QE right quantitative easing let's go to help.
But how do you feel about health -- your your long hikes over the I am I on the excelled in the fund and has been very profit for why is -- Well you know we were diversified portfolio and -- bond to have some commodities -- an ice and was working here.
If they are absolutely -- thing you are -- you're making money from the you've got -- pessimistic outlook and that's an important point to be made here.
This and where is the Fed's money creation going it's gotta go somewhere it's not going in the bond market is going -- the stock market however once we reach that.
Prior three and a half percent special that I mentioned 2010 that's -- we -- and -- had every reason to believe that will be there in the next few quarters watch out below.
Michael pent -- good to see you thank you does it shock -- anybody that he's really good friends with Peter -- a.
Michael as it pets so portfolio strategies she's gonna do well yes coming bond market's collapse -- them well yeah becoming bond market collapsed you know we have Gary Cohen of Goldman Sachs worried about this as well not they and an an institutions that collapsed but he he is concerned about the -- on trade there.
So should you OK and I will thank you thank you very much -- and everybody read the book all the.
