CNBC article admits that America is headed towards a financial collapse.
Michael Pento wrote an article yesterday on CNBC’s official website warning Americans about a coming recession that, as he described it, could be “worse than 2008.”
Pento cited the horrific start to 2016 for the S&P 500 and the recent stock market tumble which came as an aftershock of last week’s economic turmoil in China. He even pointed out that American recessions throughout history have been cyclical and the country is due for another one.
A major contributor for this imminent recession is the fallout from a faltering Chinese economy. The megalomaniac communist government has increased debt 28 times since the year 2000. Taking that total north of 300 percent of GDP in a very short period of time for the primary purpose of building a massive unproductive fixed asset bubble that adds little to GDP.
Now that this debt bubble is unwinding, growth in China is going offline. The renminbi’s falling value, cascading Shanghai equity prices (down 40 percent since June 2014) and plummeting rail freight volumes (down 10.5 percent year over year), all clearly illustrate that China is not growing at the promulgated 7 percent, but rather isn’t growing at all. The problem is that China accounted for 34 percent of global growth, and the nation’s multiplier effect on emerging markets takes that number to over 50 percent. Source
The article should silence skeptics like President Obama who arrogantly said that economists warning of a financial downturn are “peddling fiction.” Pento even correctly pointed out that the Fed will soon be incapable of providing relief for the economy through lower interest rates which means the market meltdown is inevitable.
You can read Pento’s article here.