As the Trump administration escalates its demands that the Fed cut interest rates by 50 basis points, DOUBLE DOWN asks Michael Pento if the economy is really as great as they say it is. In a free market interest rate environment, both the public and private sectors would be insolvent. Debt is now over $245 trillion and that has led to asset and equity price booms globally. The S&P 500 is at 18 times trailing twelve-month earnings per share (EPS) while EPS growth has crashed from 25% to 0%. Markets are at their most overvalued in history other than 1999. If you look at the real economy, outside of the financialized debt and Fed fueled bubbles, Michael Pento notes that auto sales have plunged and retail sales are weak. Pento says he sees the return of stagflation — prices rising while wages and growth fall. Finally, why has the yield curve inverted? For technical reasons? Or for the same reasons it always inverts — there is a recession 16-18 months out on the horizon? Tune in to hear more.
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