Is This 2008 Again For Gold & Gold Shares Or Is It Rally Time?
May 26, 2012
Investors around the world are asking the critical question, are we looking at 2008 all over again or not? Today Michael Pento, of Pento Portfolio Strategies, writes exclusively for King World News to let readers know the answer to that all-important question. Here is what Pento had to say about the situation: “As most of you already know, I have for years been in the vanguard warning about the inflationary policies pursued by global governments and central banks. However, we now face a hiatus of monetary intervention and that has once again brought about the fear of deflation—which is the natural countervailing force to inflation.”
Michael Pento continues:
“The value of any currency is what the market perceives its value to be. Even though there may not be an actual reduction in the supply or that currency, the market will price in the effects of a decrease in the second derivative of money supply growth and the possible eventuality of deflation; if market forces are allowed to operate.
In the U.S. for example, during the late summer and early fall of 2008, M3 was growing at a 10-15% annual rate. It wasn’t until the beginning of 2009 that money supply growth rates began to decline rapidly. And they didn’t actually turn negative until the fall of 2009. Money supply growth rates bottomed out in May of 2010 at -9%….