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Disaster For Markets And Economies Worldwide And Chaos On A Global Scale
Greetings,
Disaster For Markets And Economies Worldwide And Chaos On A Global Scale
On the heels of another chaotic trading week in major markets, today one of the top economists in the world sent King World News an incredibly powerful piece warning people to expect disaster for markets and economies worldwide and chaos on a global scale. Below is the fantastic piece from Michael Pento.
By Michael Pento of Pento Portfolio Strategies
May 16 – (King World News) – Central banks are incapable of saving economies or creating growth. The only thing a central bank can do is create inflation. These market manipulators set forth on a journey seven years ago to save the world by engaging in massive monetary manipulation, euphemistically called Quantitative Easing (QE), and a Zero interest rate policy known as (ZIRP).
As I could have told them, all this easy money failed to create real growth. The economy, held back by massive debt levels, initially clocked in at 0.2% for the first quarter. This number is set to be revised down to negative territory due to a huge increase in the trade deficit during March. And the second half isn’t setting up to be much better.
But the Fed was successful in re-inflating the housing and equity bubbles and also creating another new massive bubble in the bond market.
Despite tepid growth, most at the Fed have become anxious to wave the “Mission Accomplished Banner” and to move towards interest rate “normalization”. Ceremoniously, they have set goals for the economy to reach in order to begin that long journey: unemployment around 5% and inflation at 2%.
As the Fed’s luck would have it, discouraged would-be workers have dropped out of the labor force and many employees have found it more profitable to sit home than to work, which has allowed the unemployment rate to approach the Fed’s target. The unemployment rate has finally returned to the 2008 bubble level of 5.4%. But when we look more closely, (at the chart below) employment-to-population-ratio is nowhere near where it ought to be….More Here
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