Money manager and economist Michael Pento predicts, “We are going to have an election in this country that is the most contested vote this country has ever seen. Whichever party that loses is not going to accept the results. That’s mad chaos for the stock market, and that is one of the things I am thinking about when I am managing money.”
Another thing Pento is thinking about is massive Fed money printing in response to CV19. They have printed a massive amount in a very short amount of time. Pento explains, “They borrowed $3.3 trillion in fiscal 2020. All of it was monetized by the Federal Reserve. We switched to an inflationary hedge, and that worked out wonderfully for us. Then a funny thing happened at the end of July, the PPP loans, the paycheck protection loans, they were exhausted. The money that was spent and sent by helicopter, $1,000 per adult, $500 per child and $600 in enhanced unemployment, that was all spent too. So, you have this massive fiscal cliff I warned about is here and here now. Last week, I got much more defensive. . . . We borrowed $3.3 trillion, and that was monetized by the Fed, and that is all going away. The amount of new borrowing is done.”
Pento points out one huge lingering problem, and that is unemployment and people still collecting a check. Pento says, “There are many programs that people have access to get unemployment insurance. One of the major ones is called Pandemic Unemployment Assistance (PUA). That number is 29.6 million people when you include continuing claims and pandemic claims for unemployment. The PUA portion was up one million people last week. The number of claims might be going down under the traditional channels, but they are all filing claims under the PUA.
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