Gold and 2011-Michael Pento

In this interview Michael Pento Senior Economist at Euro Pacific Capital discusses 2011, gold and the Federal Reserve.  Next year is going to be a wild year.  Inflation will continue to show its ugly head on goods we need such as food, energy, healthcare and education.  The United States is quickly loosing currency and credit credibility on a global level.  The Federal Reserve is to the point where monetizing debt is becoming their only option, this is a major red flag.  Bond investors are quickly loosing confidence.  As a bond investor when you see credit, currency and inflation risk on the horizon you know there will be a bear market in bonds moving forward. 

Next year will be more of the same.  Look for precious metals, agriculture and energy to do well.  The possibility of a major currency crisis in both the Euro and Dollar is very high.  Government debt is out of control and it does not matter how much they tax businesses and citizens.  US Treasuries will have a horrible year next year and for years to come.  The major buyer of US Treasuries will likely be the Federal Reserve.  China and Russia will continue to quietly liquidate US Treasuries and convert those funds to hard assets pushing commodity prices even higher.  The government will continue to cover up problems while not fixing the problem or prosecuting anyone who actually caused the problem.  The philosophy of our government is pretend and extend.  Pretend the problem is fixed and extend the final result as long as possible.  This strategy is absolutely happening in both the financial collapse and the Gulf Oil Spill. 

We are living in historic times.  People are waking up but pain is inevitable.  That is ok, we are grown ups.  Let’s get the pain over with so we can rebuild.  The longer we pretend and extend the worse these problems become.  Full Interview