Today one of the top economists in the world predicted that the US economy is going to experience a “complete collapse.” He also stated that this economic collapse will “create an upside explosion in gold that will shock the world.” Michael Pento, founder of Pento Portfolio Strategies, wrote the following exclusive piece for KWN.
October 17 (King World News) – “Complete Collapse & Economic Meltdown”
The gradual erosion of the U.S. dollar’s status as the world’s reserve currency has been greatly hastened of late. This is due not only to the perpetual gridlock in D.C., but also our government’s inability to articulate a strategy to deal with the staggering $126 trillion of unfunded liabilities….
Our addictions to debt and cheap money have finally caused our major international creditors to call for an end to dollar hegemony and to push for a “de-Americanized” world. China, the largest U.S. creditor with $1.28 trillion in Treasury bonds, recently put out a commentary through the state-run Xinhua news agency stating that, “Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated.”
In addition, Japan (our second largest creditor holding $1.14 trillion of U.S. debt) put out a statement through its Finance Minister last week saying, “The U.S. must avoid a situation where it cannot pay, and its triple-A ranking plunges all of a sudden.” It is both embarrassing and hypocritical to be lectured by Japan about an intractable debt situation. However, the sad truth is we have become completely reliant on these two nations for the stability of our bond and currency markets.
We arrived at this condition because our central bank has compelled the nation to rely on asset bubbles for growth, and preventing the deleveraging of the economy by forcing down interest rates far below a market-based level. For example, instead of allowing debt levels to shrink, the Fed’s virtually-free money has now caused consumer credit to surge past the $3 trillion mark by Q2 2013; that is up 22% in the past three years. And of course, the Federal government massively stepped up its borrowing beginning in 2008, piling on over $6.8 trillion in additional publicly traded debt since the start of the Great Recession.
Continue reading the Michael Pento piece at KING WORLD NEWS