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Macro expert and money manager Michael Pento returns for part two of our interview with him in which he suggests that the S&P 500 could drop by 30-40% to around 3,000 points if market forces were allowed to operate naturally. This drop would correspond to a severe recession or deflationary period.
He expresses concern about the permanent monetization of debt, which could significantly impact inflation and growth rates.
Michael also emphasizes that his model provides early warning signs of when major market participants are likely to become nervous and sell, allowing for defensive dividends to be accrued.
To watch Part 1 of this interview with Michael, go to:
Visit Michael at
Or call (732) 772-9500 or email mpento@pentoport.com
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There’s no doubt that it’s a very challenging time right now for the average investor. Above and beyond the recent economic impacts of COVID, the new era of record low interest rates, runaway US debt and US deficits, and trillions of dollars in monetary and fiscal stimulus stimulus has changed the rules of investing by dangerously distorting the Dow index, the S&P 500, and nearly all other asset prices. Can prices keep rising, or is there a painful reckoning ahead?
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IMPORTANT NOTE: The information and opinions offered in this video by Wealthion or its interview guests are for educational purposes ONLY and should NOT be construed as personal financial advice. We strongly recommend that any potential decisions and actions you may take in your investment portfolio be conducted under the guidance and supervision of a quality professional financial advisor in good standing with the securities industry. When it comes to investing, past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All investments involve risk and may result in partial or total loss….(read more)
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
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HOW TO INVEST IN SILVER: Silver IRA Investing
Michael Pento, a financial expert and the President of Pento Portfolio Strategies, has recently made a bold prediction about the state of the stock market. According to Pento, the S&P 500 is set to drop by 40% when the recession or deflation arrives. This prediction may sound shocking to some, but it is worth exploring the reasons behind Pento’s forecast.
First and foremost, it’s important to understand what Pento means by “recession” and “deflation.” A recession is a period of economic decline characterized by a decrease in gross domestic product (GDP) for two consecutive quarters. Deflation, on the other hand, is a sustained decrease in the overall price level of goods and services.
Pento believes that the United States is currently in the midst of an economic bubble that is being fueled by historically low interest rates and excessive government spending. He argues that this bubble will inevitably burst, leading to a recession and ultimately deflation. Pento also points to the fact that the stock market has been on a bull run for over a decade, which he believes cannot be sustained indefinitely.
So, why does Pento predict that the S&P 500 will drop by 40% when the recession or deflation arrives? Essentially, he believes that the market is overvalued and that a correction is long overdue. Pento notes that prior to the COVID-19 pandemic, the market was already overvalued based on traditional metrics like the price-to-earnings ratio. The pandemic caused a brief drop in the market, but it has since rebounded to new all-time highs. Pento argues that this growth is unsustainable and that a correction is imminent.
While Pento’s prediction may seem extreme, it’s worth noting that he isn’t the only financial expert who is sounding the alarm about the state of the stock market. Other analysts have also noted that the market is overvalued and that a correction is likely in the near future. Some have even suggested that a crash could be imminent.
Of course, no one can predict the future with complete accuracy. It’s entirely possible that Pento’s prediction won’t come to fruition, or that the market will drop by a different percentage than 40%. However, it’s always wise to prepare for the worst-case scenario when it comes to investing. Investors who are heavily vested in the stock market should take steps to diversify their portfolios and limit their exposure to riskier assets.
In conclusion, Michael Pento’s prediction that the S&P 500 will drop by 40% when the recession or deflation arrives may sound alarming, but it’s grounded in his belief that the market is currently overvalued and due for a correction. Investors should take note of Pento’s warning and take steps to protect their portfolios in the event of a market downturn.
Retiring in 20 years? Due to inflation, you may need upwards of $2.6 million to maintain your existing lifestyle, with the ongoing effects of high inflation, lower forecasted stock market returns, and stagnant wages, achieving a secure early retirement could be more challenging than ever before.
Don’t worry the whole thing will come crashing down. America is broke why do you think the government keeps printing money. We’ve been in a recession get ready for a Great Depression. Life Good? Life Getting Better?
In 2018 the stock market crashed when interest rates got too high. Now with rates even higher, the stock market is doing just fine. Why?
Observation: The S&P is up over 12% YTD. The average American is losing purchasing power for the past 12 months (I call that a recession). Shadow Stats tells us real inflation is much higher than "official" inflation. If the price of a commodity can be manipulated it will be and that includes the price of money itself.
going up every day. hello.
Age is our friend. At 51 seen the 90s recession, technology bubble, GFC, repo crisis that I would argue has never left. I 100% agree with Interest rates. We will never see rates in my life again at Covid levels. I see the 10 year at 5% in the next 12 months. Great call.
CPI is 1 year backward. Fed funds is 1 year forward.
You CANT use them to calculate the real rate!
Interest rates at the level of the 70s and 80s? You would have a housing collapse. Not possible.
Although I have followed Michael Pento since his Peter Schiff days. I just tuned-in to your channel and subscribed. You're a great interviewer who lets his guest speak without interruption.
salty bear
This was an awesome video
52:44 Dude is working with P&F! Respect!!
The endless parade of hyper-bearish gold bugs continues. When that favorable environment for gold materializes, just buy bitcoin. It will smear gold. The dollar is going to rip first. And both gold and bitcoin will go down before they rip.
Hmm he said inflation is from helicopter money. Sure there was stimi checks, but socially at least you have to admit if the government bailed out and gave out free PPP loans without stimi checks the masses would have been like WTFzzz??? Here we go bailing out big businesses and screwing the little guy.
More doom and gloom predictions from people who just want to steal your money. These idiots are the last people anyone should ever listen too.
What he goes into at 19:00 is very scary. The FED does not control long-term interest rates.
Recession and market crash for this year… never happened so youve been wrong all year long. If you listened to him and short the market you'd have lost ton of money.
In spite of how everyone is frightened and calling the crash, there is already an excessive amount of demand waiting to absorb it, which is another reason it's less likely to happen that way. This forecast was not made in 2008, at least not by the general public, as I will explain below. The ownership rate peaked in 2004, according to the other comment. We reached a peak in the second quarter of 2020 and are currently at the median level. From 2008 to 2012, it fell by 3%, and in the second quarter of 2020, it dropped from 68 to 65.
I really like Mr. Pento. He is smart, humble, and a straight talker. Thank you. ❤
Pento: add JP to your model especially if you hold treasuries!
Adam: interview Weston Nakamura (new @Blockworks) as he explains the important role JP plays in treasury bond prices (biggest buyer) and why TLT plunged through the floor last year (spoiler, it was the high DXY and high hedging FX costs that led to the unwind of the JPY/USD treasuries trade).
Michael is my favorite guest on your program.
Great show
Triple top is a bullish pattern.
Dose of reality. This guy has been saying this for over a decade now.
What Michael showed is useful usable information for investors. What the other guy showed is a reporting dashboard. I do not need you to tell me the gold is up or down, I need your insight to what that meant. That is the difference between education and commercial.
GOLD and SILVER is real money; everything else is fugazi!
Not happening
S&P is not the measure to be looking at. See the charts of stocks like mmm, mos, iipr, de, tg, bac, xom. The bear market has been going on under the surface for a while. The money is just concentrating in the best companies who will survive a recession and benefit from the next big paradigm shift (AI). The media's fixation on the S&P is doing a diservice to average investors.
If nothing else, Pento has the best vocabulary on youtube
A micro example of the future:
PWCC
They were loaning money on sports cards that were inflated by stimmies.
The asset value dropped when the money dried up and PWCC needed to be bailed out by Fanatics
Why would people hold onto 3% debt if the underlying asset is dropping in value? That’s the problem. Home prices are not stable in a high interest rate environment following QE, apparently. We are only months into the Fed not buying MBS. If they get back in, yes, prices will go up again, but I think they understand what they did to housing now and will not return to buying MBS.
SPXU!!!!!!!!
His shirt looks really expensive!!
Pento Bean is a Peter Schiff ex employee. He's riding on Peter's coattails
I'm looking for a Silver Volatility Index
what does it mean "when high yields blow out" ? does it mean when high yields end? junk bonds crash??