Pento

Michael Pento Mid-Week Reality Check

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Michael Pento’s intermezzi are very fun to listen to. This latest version is particularly emotional.

Summary:
– He is 70% in cash
– He has some gold
– He has some short positions
– He expects a market sell-off
– He expects end of tapering by mid 2014
– He sees macroeconomic indicators plunging: GDP, ADP, ISM, NFP … Indeed, the bullandbearwise index, which monitors macroeconomic trends, is down considerably.

– We will see the U.S. dollar plunge if tapering ends and we see it right now as the U.S. dollar is now rolling over as you can see on this chart:

– U.S. bonds will not be the place to stay in, on a declining U.S. dollar.

Warning: Deflation is on the horizon

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As we know, Ben Bernanke sinked the markets yesterday and this has consequences.
As the premium on silver of some silver miners soars to 30%, we are getting to a point where mining companies are actually losing money, especially when they have mining projects in development. At these prices, nobody is going to invest in exploration companies as they would lose money in doing so.

On the other front, namely bonds, we see the U.S. treasury market decline in price while yields rise.

These high yields in bonds and mortgage yields will in turn crash the stock market and the housing market respectively, if the Federal Reserve stops its monetary easing.

These events are very deflationary, if Ben Bernanke doesn’t up its QE, we will need to position ourselves in deflationary assets like cash and bonds.

Michael Pento warns for deflation in this status update.
http://www.pentoport.com/mp3/MRC130619.mp3