Election Chaos Means Market Chaos – Michael Pento

Sunday, September 13, 2020
By Paul Martin

By Greg Hunter
September 12, 2020

Money manager and economist Michael Pento predicts, “We are going to have an election in this country that is the most contested vote this country has ever seen. Whichever party that loses is not going to accept the results. That’s mad chaos for the stock market, and that is one of the things I am thinking about when I am managing money.”

Another thing Pento is thinking about is massive Fed money printing in response to CV19. They have printed a massive amount in a very short amount of time. Pento explains, “They borrowed $3.3 trillion in fiscal 2020. All of it was monetized by the Federal Reserve. We switched to an inflationary hedge, and that worked out wonderfully for us. Then a funny thing happened at the end of July, the PPP loans, the paycheck protection loans, they were exhausted. The money that was spent and sent by helicopter, $1,000 per adult, $500 per child and $600 in enhanced unemployment, that was all spent too. So, you have this massive fiscal cliff I warned about is here and here now. Last week, I got much more defensive. . . . We borrowed $3.3 trillion, and that was monetized by the Fed, and that is all going away. The amount of new borrowing is done.”

Pento points out one huge lingering problem, and that is unemployment and people still collecting a check. Pento says, “There are many programs that people have access to get unemployment insurance. One of the major ones is called Pandemic Unemployment Assistance (PUA). That number is 29.6 million people when you include continuing claims and pandemic claims for unemployment. The PUA portion was up one million people last week. The number of claims might be going down under the traditional channels, but they are all filing claims under the PUA. We have a huge divergence of what’s happening in the stock market to what’s happening in the underlying economy. Rod Serling could not have imagined how crazy this stock market valuation has become. The valuation inequities is 180% of GDP. To put that into perspective, it was 140% of GDP in March 2000 just before NASDAQ lost 85% of its value.”

Pento says his portfolio is now weighted with 20% Gold and Silver. He predicts Fed policies that are coming soon on inflation, and interest rate suppression “will be rocket fuel for gold and silver. . . .And gold and silver are just getting started. . . . If Bitcoin is $10,000 per unit, why can’t gold be $5,000, $10,000 or $15,000 per ounce? With the amount of dollars out there, it could easily be $5,000 or $8,000 per ounce, and that is where it is headed.”

Pento also says, “The bond market will eventually collapse, but the biggest collapse coming is the faith in all fiat currencies.”

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with economist Michael Pento.

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