Michael Pento Warns of “Chaos in the Markets and a Big Leg Down”

by Mike Gleason, Money Metals Exchange Coming up we’ll hear a tremendous interview with Michael Pento of Pento Portfolio Strategies. Michael sees the air coming out of what he calls an epic bubble. And he reveals the asset classes he believes will do well – plus those to avoid. Don’t miss an incredibly important and insightful interview with Michael Pento, coming up after this week’s market update. Well, choppy trading continues in precious metals markets as volatility tamps down in equities. The VIX stock market volatility index has moved from a four-year high of over 50 two weeks ago to around 25 this week. For perspective, the 52-week moving average on the VIX is at 16, so a 25 reading is still well above average for the past year. An elevated VIX may dissuade the Federal Reserve from hiking rates. Any move by the Fed that is perceived to be adverse to the stock market could cause volatility to spike in a sharp sell-off. The Fed meets next Wednesday and Thursday for its long-awaited decision on interest rates. Policymakers appear to be split on whether to hike short-term rates for the first time in more than 9 years. Fed watchers are also divided as to whether the central bank will finally end its zero interest rate policy. Based on futures contracts traded on the Chicago Mercantile Exchange, the market is now saying there is a 74% chance that the Fed won’t raise rates next week. However, the futures market is pricing in a 60% probability of a rate hike before year’s end. Interest rate hawks point to job gains and a declining official unemployment rate. Last Friday’s jobs report showed unemployment fell to 5.1% in August. But the unemployment rate the government reports fails to capture most of the people who are actually out of work. Fed economists are well aware of the fact that a record number of Americans are now out of the workforce – with the labor force participation rate at a 38-year low of just 62.6%. That translates into a jobless rate of 37.4%. Quite a stark contrast to the jury-rigged official unemployment figure of just 5.1%. Just a few weeks ago, most experts expected a quarter-point rate hike in September. Now the odds are against such a move. It’s been a recurring pattern. The Fed persuades everyone to expect a rate hike and rosy economic growth numbers. And then when the data falls short, expectations for a rate hike decline. Continue Reading Transcript of Interview>>> AUDIO MP3 INTERVIEW HERE>>>

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