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Money manager Michael says inflation has nowhere to go but up. Pento explains, “We have printed enough for this to go hyperbolic. We have plenty of excess reserves. We have already hit our core (Fed) inflation target. We are already up 2.2% year over year. If you want to be honest, we already have the condition much like the 1970’s of stagflation. . . . The Federal Reserve promised us we were on the road to recovery. They said we would be growing at 3% and we are growing at 0%. They said they could raise interest rates and
normalize the Fed Funds Rate, and they can’t do it. The dollar index went up to 100 on the belief that this was going to be the case, and it is absolutely not true. That’s how the market is losing faith in the value of the dollar. We are in a condition of stagflation, make no mistake about it.”Are we also in a recession too? Pento says, “They can do this indefinitely until inflation becomes intractable. In the United States, we are running up on 90 months of 0% interest rates, and what do we have for that? Fourth quarter GDP was 1.4%, and that was bad enough, but first quarter has a zero handle. It was 0.5%. That’s what we get for blowing up the Fed’s balance sheet to $4.5 trillion? That’s what we get for manipulating bond yields down to 0% for 90 months? We are virtually in a recession. If we are not in a recession, we are in a flat line or dead line economy, and it’s zero.