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Pento - Looming Debt Market Collapse to Destroy the Dollar

Today Michael Pento told King World News the large trade deficit and desire to consume foreign goods is evidence that the United States is growing weaker by the day. Pento, who founded Pento Portfolio Strategies, also said foreigners may soon start to reject the idea of purchasing US bonds. Pento had this to say about the situation: “The Main Stream Media is extolling the virtues of our rising U.S. trade deficit as a sure sign the economy is well on the road to a full and viable recovery. It was reported this week that our level of trade imbalance jumped to a six-month high in December to $48.8 billion (up 3.7%), from $47.1 billion in the prior month. For all of 2011, the shortfall grew 12% to $558 billion, the most since 2008.”

Michael Pento continues:

For the uninformed on Wall Street and in Washington, the growing tide of red ink is a signal that America is returning to normalcy. The only problem with that is our so called ‘normalcy’ is rapidly leading us into insolvency. The sad truth is that our desire to consume foreign made goods, with money that is borrowed, is evidence that our country is growing weaker by the day.

If the U.S. economy was indeed strengthening, it would mean that we are producing more goods and services available for foreign purchase. That would serve to LOWER the trade gap, not increase it. What is occurring, instead, is an increase in consumer credit, which has enabled the American consumer to purchase even more foreign made goods.

To prove that we are returning to our borrowing and consuming ways, the Consumer Credit report showed that credit rose at an annual rate of 7.6% in the fourth quarter and was up 9.3% for the month of December....

Continue reading the Michael Pento piece below...

To hear legendary company builder Rob McEwen, original Founder of

Goldcorp, discuss which company he invested $110 million

of his own money in and why click on the logo:

“The consistent and growing flow of dollars out of the country leads to a weakening currency and the transfer of an ever increasing amount of U.S. debt into foreign control. But it just so happens that the U.S. is happy to offer foreign investors an unlimited supply of debt for them to purchase—lucky for them.

If the Congressional Budget Office has is correct, this year’s budget deficit will be $1.1 trillion…and it would mark the fourth year in a row with deficits north of $1 trillion! Foreign central banks now hold more than 50% of all U.S. debt. But their willingness to continue recycling our trade deficit and to hold dollar-denominated assets may soon start to wane.

Our own bond bubble will pop just like it has already burst in Southern Europe. When the U.S. debt market collapses, trillions of dollars will be thrown on to the foreign exchange market, as foreigners repatriate back into their domestic currencies. For most Americans the destruction of our dollar and our debt will be very pernicious. Owning precious metals will help preserve your wealth when the USD loses its status as the world’s reserve currency.

To Learn more about Michael Pento’s financial management services CLICK HERE.

Eric King

KingWorldNews.com

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