Pento:  “The mainstream media will never report this, but the American consumer is about to be brought to their knees.  In fact, I am extremely worried about the global economy and consumers in all nations around the world....

Continue reading the Michael Pento interview below...  


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“We have Chinese growth slowing dramatically.  China used to have a double-digit growth economy, but I am only looking for 5 to 6 percent growth in 2014.  So we now have a problem with slowing growth in China.

Second, we have emerging-market chaos.  This has caused tremendous turmoil in their currency, interest rate, and equity markets.   We also have flat incomes here in the United States, after taxes and inflation.  Real disposable income was only up 0.7% for the entire year of 2013.

We also have an overvalued stock market in the United States.  Even Warren Buffett is worried about this situation.  The total capitalization of the stock market is now at 112% of GDP.  That is actually higher than it was at the start of the Great Recession.  The historical average of the total market cap of the stock market as a percentage of GDP is only 50%!  This relationship goes back for many, many decades.  So the US stock market has been priced in the stratosphere.  The US stock market is now more than twice the historical valuation as a percentage of GDP.  I promise you that is unsustainable. 

We have a bubble in bonds, a bubble in stocks, and what is the US doing about it?  Unbelievably, politicians are now debating about raising the debt ceiling even higher.  The deficit for this year is going to be over half a trillion dollars.  I will tell you, that’s a rosy estimate for the deficit because that’s assuming 3% GDP growth which we will never see.

Remember, Eric, all of this is taking place as the Fed tapers.  What does the Fed taper really mean?  It’s the end of the artificial support to the the bond market, real estate market, and the equity markets.  So I am as bearish as I’ve been since the year 2007 on the global stock markets and the entire world economy.

What is the mainstream media telling people as we begin to see what will be a historic global contraction?  The propaganda machine is telling people that we have accelerating growth in 2014.  How can growth accelerate when interest rates are skyrocketing in the emerging-market economies, Chinese growth is slowing, stock markets are historically overvalued, and consumer incomes are flat?

The bottom line is all this is going to bring consumers to their knees this year.  I think it’s time to get into cash, buy gold, and get short the stock market.  That’s what we are doing here at Pento Portfolio Strategies, and I think that is going to be the strategy that serves investors best in 2014.”

UPDATE - KWN will be releasing interviews all day today.

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”

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The audio interviews with John Mauldin, Eric Sprott, Bill Fleckenstein, Egon von Greyerz, Dr. Paul Craig Roberts, MEP Nigel Farage, James Dines, Gerald Celente, Andrew Maguire, David Stockman, Art Cashin and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

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