Pento – Markets to Plunge This Summer & Eurozone Effect
April 21, 2012
With investors concerned about the action in equity markets, as well as gold and silver, today Michael Pento, of Pento Portfolio Strategies, writes for King World News to warn that global stock markets will plunge this summer. Pento had this to say about the situation: “I would have thought that the decoupling myth between global economies would have been completely discredited after the events of this past credit crisis unfolded. Back in 2007 and early 2008, investors were very slowly coming to the realization that the U.S. centered real estate crisis was going to dramatically affect our domestic economy.”
Michael Pento continues:
“However, the prevailing view at the time was that the global economy — especially emerging markets — would be almost totally immune from any such slowdown. But the truth was that emerging market economies took America’s financial crisis directly on the chin, causing the Shanghai Composite Index to drop 70% in just one year.
Now investors are being told that the worsening sovereign debt crisis in Europe will leave the U.S. economy unscathed. The reason for the perma-bulls’ optimism is based on the fact that America doesn’t have a strong manufacturing base. In fact, manufacturing now represents just 10% of our once diversified and vibrant economy. Wall Street is now hoping that since we don’t make many things to export to Europe, our GDP won’t suffer a significant decline at all….