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“Massive Reset” Looms, Pento Warns “Central Bankers Are Trapped”

Courtesy of ZeroHedge View original post here.

By Greg Hunter’s USAWatchdog.com,

Money manager Michael Pento says forget about the sky high stock market because everything is being propped up with massive global money printing.

Pento explains, “Let’s look at the facts…"

"Global debt has now risen above $250 trillion. Let that sink in for a second, and it is a record percentage, 330% of GDP. So, we have never seen debt like this before in nominal terms. Even as a percentage of the phony GDP that is engendered by free money, it is at a record. So, the central bankers have realized that they are trapped. There is no escape from global massive debt monetization…

We have China, Japan, Europe… and even our Federal Reserve is back in QE. We have a standing repo facility. We could only raise rates to 1.5%, and we are headed back to 0%. So, the only way this massive pile of debt is able to be serviced, even on the margins, is when money is free and central banks continually debase currency.”

Pento goes on to say, “Now I hear from the central bankers that inflation is not rising fast enough…"

"They are panicked that inflation is not rising fast enough. You have to wonder why the faith in fiat currencies isn’t eroding even more rapidly. It is going to because all the ingredients are there. I think the pace of that erosion is going to become a deluge…

The zeitgeist of the day should be central bankers are trapped and they can never raise interest rates. Real interest rates will be falling, and if you want a chance of staying in the middle class, you have to preserve your purchasing power, and that means owning gold.”

Pento recommends, “I have 10% of my portfolio in gold, and I am going to increase that…"

"I would think you need at least 10% in gold, physical gold, right now. If you don’t have that, then you are doing yourself a great disservice. I include gold, silver and platinum in the precious metals basket, and that amount should be increasing…

We are going to have a massive reset, and all of this debt is going to have to be defaulted upon. It is going to be defaulted upon two ways: through inflation and through implicit restructuring. Knowing how they are going to default on this debt is going to make you solvent…

If you look at all the ingredients that surround your decision as to when you should increase your allocation to precious metals, all those ingredients are in place and getting more so.”

Join Greg Hunter as he goes One-on-One with money manager Michael Pento of PentoPort.com.

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