Global Economy is Imploding – Michael Pento

by Greg Hunter, USA Watchdog Money manager Michael Pento thinks the global economy is terrible. So, will the Fed still raise rates soon? Pento contends, “The global currency situation will actually go into hyper-drive if the Fed follows through and goes on this protracted rate hiking campaign. Wall Street is a myriad and plethora of myths. . . . One myth that is out there today is the Federal Reserve may go and do a ‘one and done’ rate hike. Where has that ever been done before? Previous rate hikes have been about 300 basis points (or 3%). The last one was 425 basis points. . . . The Fed wants to be at 1.6% by the end of 2016. The only reason why they won’t get there, and I don’t think they ever will get there, is if the global economy continues to collapse. By the way, that is exactly what is happening. The global economy is imploding. Our clueless and feckless Federal Reserve is fighting inflation. . . . There is one area of inflation and that is asset prices. That’s where all the inflation has gone. The real battle is the global collapse of commodities. Commodity prices are at panic lows and even lower. We are having a global implosion of growth because China is no longer a sustainable communist regime.” Pento also contends China is in financial trouble, and that means the rest of the world is in deep trouble too. Pento explains, “Global debt is up to $200 trillion. China’s debt alone, since 2007, is up 300%, but this kind of debt that they raised wasn’t debt they raised from the private sector. It came by government edict. What was this debt for? It was to build empty cities, to build airports without planes, to build bridges without cars. These are unproductive assets. This is why the debt to GDP ratio is not only skyrocketing in China, but it is skyrocketing all over the globe. That means Japan, Europe and, yes, even the United States. There is no delinking, and China is responsible for virtually all the global growth since the great recession in 2008, and now that demand is collapsing. That’s why you see Brazil, Russia, Japan, Europe, and Australia either in recession or growing with a 1% handle.” Continue Reading>>>

Sharing is caring!