Eric King:  “Here we are after QE was initiated many years ago, and we have a pumped-up stock market and bond market, and yet the economy has essentially gone nowhere -- it’s still struggling with real unemployment of about 23%.  Where are we headed from here?”

Pento:  “Well, first of all, I find it coincidental that the only two things up 30% last year were the S&P 500 and the size of the Fed’s balance sheet....

Continue reading the Michael Pento interview below...


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“Everything else such as employment growth, the employment-to-population ratio, is falling, and had plummeted from highs in 2007.  We are not seeing corporate earnings growth or revenue growth. 

The only thing you are seeing growth in is not the labor force but rather growth in the Fed’s ability to print money.  And it’s not only the Fed, it’s also Japan.  If look at the disaster over there under ‘Abenomics,’ it wasn’t enough that the yen was being diluted by $70 trillion yen per annum, but they are now actually lending money to the Japanese banking system, with almost no interest rate attached to it at all.

So we’re heading toward dramatic swings between inflation and deflation across the globe, and I think ultimately we are headed for a complete collapse of the bond markets in Japan and in the United States.  That’s where we’re headed, Eric.

The Fed knows what they are doing is wrong and they desperately want to get out of quantitative easing ... but at their current pace (of QE) they are monetizing over 100% of our annual deficits.  When they leave, who is going to supplant those (bond) purchases?  We don’t have the savings to do it.

China is selling Treasuries, so interest rates are going to have to rise.  I think it’s a pipe dream that the Yellen-led Fed is going to get out of QE.  They are going to be dragged back in, grudgingly, probably some time in the summer when the economic data is so clearly abysmal and we have a huge selloff in the major averages. 

When they start (to increase) QE back up again, it’s an admission, at least tacitly, by the Federal Reserve that they have lost complete control of monetary policy in the economy, and they are addicted to a permanent form of asset price manipulation and counterfeiting.  That’s not going to be an easy transition for the Fed to make.  It (the Fed) is going to have to do it in a panicked state -- that’s when the calamity hits in a salient way.”

Pento also warned:  “There has been a sharp downward move in economic data.  It started in December and it’s getting worse.  Look at the pending home sales, and new home starts down 16%.  Now some of this has to do with weather, but you can’t blame bad economic data in Turkey, Brazil, China, and in Japan on a snowstorm or two in the United States.  So the economic data is getting worse and worse, and I expect that to intensify as they year progresses.” 

Pento also discusses gold, the miners, and what investors should be doing with their own money right now in front of this coming crisis in his tremendous audio interview which is available now and you can listen to it by CLICKING HERE. 

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”

To order from Amazon CLICK HERE.

© 2014 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, Art Cashin, Rick Rule, David Stockman, John Mauldin, Eric Sprott, Bill Fleckenstein, Egon von Greyerz, Dr. Paul Craig Roberts, MEP Nigel Farage, James Dines and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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