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Pento:  “Inflation is a persistent and pervasive fall in the purchasing power of paper money.  It is not too many people working and producing or being productive.  That is why I believe the Fed is going to be behind the inflation curve for years to come....

Continue reading the Michael Pento interview below...


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“Now, at Pento Portfolio Strategies we’ve been underweight gold since 2012.  From 2012 to 2014 we have been underweight gold.  But at the start of this year we have gradually increased our allocation to that metal because it is the only asset I can find that is not currently a victim of the Fed’s bubble.

If you look at real estate values, equity prices, art, they are all in a bubble, and especially fixed income.  That is the biggest bubble in the history of economics.  So what is not in a bubble?  Precious metals shares, gold mining shares (and gold and silver).  They (mining shares) dropped 70 percent between 2012 and 2014.

But now the artificial recovery is ending.  This strong growth, low inflation fantasy, created and promulgated by Wall Street and Washington is about to be revealed as the grand hoax that it is.  Wall Street and Washington want you to believe that we can have strong growth without inflation.

Now bear in mind what they have produced is the exact opposite.  They produced anemic growth ever since we’ve had this so-called second half recovery fantasy, which started back in 2010.  They’ve always failed to produce a recovery.  What they have produced is subpar growth -- we had a negative 2.3 percent (GDP) print in Q1. 

And we’ve produced what?  We’ve produced inflation.  Year over year CPI is up 2.1 percent.  We’ve produced asset bubble after asset bubble if you look at real estate, stocks, fixed income, junk bonds, and all other kinds fixed income investments.  But what have they told you they were going to produce?  Strong growth in a low inflationary environment.

I’m convinced that the end of QE is going to be the grand revealer.  It’s going to bring about this huge correction in asset prices.  It’s going to bring about a deflationary spiral in the economy.  And that is going to be followed by two things:  Mrs. Yellen and her merry band of counterfeiters at the Federal Reserve are going to lower the interest paid on excess reserves to zero or even into negative territory, and they will launch another round of QE.

Every time QE ended in the past the stock market fell to pieces and they came back with a rescue package of money printing and credit creation for the banking system.  And that’s exactly what I think is going to occur in 2015, and then I think it’s 1999 all over again.  We are going to have a huge blowup in asset prices, which is going to end in a deflationary destruction of these assets sometime probably in 2016.  That’s what I’m looking at, Eric, as sad as it is.”

IMPORTANT - This is one of Pento’s best interviews ever on the coming collapse and what’s next for gold, bonds, stocks, and the mining shares.  It is available now and you can listen to it by CLICKING 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.

UPDATE - KWN has more interviews being released today.

The audio interviews with Michael Pento, Gerald Celente, MEP Nigel Farage, Eric Sprott, Bill Fleckenstein, David Stockman, William Kaye, Dr. Paul Craig Roberts, John Hathaway, Grant Williams, Andrew Maguire, and 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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