- Michael Pento: Next Crash Worse Than 1929 & 2008 Combined! Devastating Metastasizing Global Depression On its Way!
by Greg Hunter’s USAWatchdog.com
Money manager Michael Pento says the next crash will be one for the record books. Pento contends, “If you look at any of the economic data coming out, it screams recession. It will be one of the worst recessions since 2008 and 1929—combined.” This is a description of a global depression. Pento contends, “Unfortunately, I think that’s exactly where we are headed. It’s not my opinion. It’s not a Cassandra. It’s not my view. It’s the entire view of all global markets. China is 45% down. There’s a bear market in Europe. There’s a bear market in Japan. There is a bear market in most of the United States.”
Why is it going to be so historically bad this time around? Pento says, “In prior recessions, the Federal Reserve was allowed to lower the borrowing costs significantly and dramatically. For instance, the Fed Funds Rate, that interbank lending rate, was 5.25%. Today, it’s between .25% and .50%. The Fed is unable to reduce borrowing costs to the consumer. All they can do is take back their measly .25% rate hike that they did in December. So, there is no debt service relief coming from the Federal Reserve. That’s number one. Number two, a normal function of recessions is a surge in the deficit. We saw this in the Great Recession from about $200 billion a year to $1.5 trillion a year. This time, if they skyrocket again . . . who’s going to buy that Treasury debt? There’s no more QE. China is a huge seller. Japan is a huge seller. So, interest rates are going to rise because sovereigns are insolvent. It’s not the banks that are insolvent anymore, although that is still the case to a great degree. Central banks are insolvent, and sovereign governments are insolvent. That’s why this is no normal recession.”