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But first, Pento tore into Goldman Sachs for their call to short gold yesterday: “I would put some credence in what these two analysts (from Goldman Sachs) said if they actually gave me a fact or two as to why I should not just avoid owning gold right here after it’s down $400 an ounce from its high, but I would prefer if they just gave me one reason why I should short gold at this juncture.


If you read their report, as I did, this is their reasoning:  I want to quote these two (Goldman) analysts, “In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast.”


So, if you comb through their report and look for one shred of evidence, one fundamental factor as to why they are going to short gold here, you don’t find one.  The reason why they are going negative on gold is because it’s not going higher, and if gold goes lower their analysis is it will go even lower, and even faster.


I mean it’s absolutely asinine when you listen to their logic....


Continue reading the Michael Pento interview below...




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“They didn’t speak at all about what’s going on in Japan, the Bank of England, or the Federal Reserve ... In Japan, under the regime of Shinzo Abe and the new central banker Kuroda, they have set up the globe for what I see as the next significant crisis, which will be exponentially worse than 2008.


...They are not only setting up the Japanese economy, but the global economy for an interest rate slingshot which is going to send yields from where they are now at about .5%, to 2% to 3% in a matter of weeks.  If that doesn’t send down the global economy, I’m so worried about a crash in global equities stemming from the earthquake that is going to occur in Japan. 


It’s going to metastasize across the ocean to the United States because we are doing almost exactly the same thing that the BoJ (Bank of Japan) is doing now ... What Japan and the US are doing is going to lead to sovereign debt collapses in the next few years.  And when the collapse of sovereign debt occurs, you are going to see sovereign bankers having to step up their level of debt monetization.


They will be faced with a decision:  They can either watch the interest rate vacuum take place and see yields skyrocket higher from the artificially depressed levels of 1.5% on the US 10-Year or .5% on JGBs (Japanese Government Bonds), all the way up to a level that is well north of the nominal yields on Treasuries.


You are talking about interest rates that could go from .5% in Japan, to 2% over the stated inflation rate.  In the United States it could go from 1.5% on the 10-Year to 6% or 7%, and I’m talking about that happening in a very short period of time.


So these central bankers and politicians will have to sit back, watch, and cheer on a global depression.  Has any central banker showed any indication of allowing the free market to be reinstated and to work its magic?  It’s absolutely out of the question.


So, my prediction is once this vacuum takes place, once these central bankers step away from their debt monetization and realize they have been the only buyers of their sovereign debt and the interest rates spike, they are going to have to come in (to the markets) in a much more significant way than they already are.  That is going to lead to what I see as global intractable inflation for a very long time.”


Pento also added: “They (the Goldman analysts) didn’t talk about interest rate suppression, quantitative easing 1, 2, 3, or 4 in the United States.  They didn’t talk about debt loads and deficits that continue unabated.  They didn’t mention negative interest rates that are becoming even more negative. 


So in conclusion I will tell you their report is asinine.  Their reasons for shorting gold were unfounded, and I would throw the report in the garbage, or you can line your bird cage with it.  That’s about all it’s worth.”    


The information above was just a small portion of this incredible interview with Pento.  He discusses how this situation will impact investors all over the world, as well as how it will impact key markets such as gold.  The KWN audio interview with Michael Pento is available now and you can listen to it by CLICKING HERE.


Michael Pento: President & Founder of Pento Portfolio Strategies and the author of

“The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market”

To pre-order from Amazon CLICK HERE.


© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.


The audio interviews with Michael Pento, John Embry, James Turk, Art Cashin, Gerald Celente, John Mauldin, Egon von Greyerz, Rick Rule, Bill Fleckenstein, Paul Craig Roberts and Nigel Farage are available now.  Also, be sure to hear the other KWN interviews which include Eric Sprott, Marc Faber and Felix Zulauf by CLICKING HERE.


Eric King

KingWorldNews.com

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