The Julia La Roche Show
#233 Michael Pento: The Great Asset Bubble Reckoning is Coming, Why We Could See A 50% Correction
Feb 14, 2025
Michael Pento, President and founder of Pento Portfolio Strategies, warns of a looming financial disaster. He critiques the Fed's inflation tactics, stating it’s been above 2% for years. Pento identifies a trio of asset bubbles in stocks, real estate, and credit that could lead to a shocking 50% market correction. Drawing from over three decades of experience, he emphasizes the importance of monitoring liquidity and discusses the impact of political shifts and the burgeoning national debt.
37:34
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Quick takeaways
- Michael Pento warns that a significant financial correction could occur due to interconnected bubbles in equities, real estate, and credit markets.
- The Federal Reserve's failure to effectively address inflation has exacerbated economic challenges for lower-income Americans, leading to increased costs of essential goods.
Deep dives
The Danger of Concurrent Bubbles
The current market environment is characterized by three simultaneous financial bubbles: stocks, bonds, and real estate. Each of these bubbles poses a significant risk, with the potential for a major correction, especially in the stock market where a decline of around 50% is anticipated. The alarming statistics indicate that the market cap of equities relative to GDP currently exceeds 200%, an unsustainable level compared to historical norms of around 100%. As the liquidity that has sustained these inflated asset prices begins to dry up, a sharp correction in the market seems inevitable.
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