by Greg Hunter
USA Watchdog
Money manager and economist Michael Pento warns the era of super low Fed manipulated interest rates is coming to an end. This is big trouble to the bond market and the overall economy. Pento explains, “I think what’s happening now is about 35 years of government manipulation of markets is about to end. The faith that we have in our government and the faith that we have in our central banks is coming to an end. As evidence of that, the 7-year note auction was the worst auction in U.S. history. . . . It just goes to show you the faith in our bond market is eroding.”
Now, we are facing multiple bubbles as opposed to just the sub-prime crisis in 2007-2008. Pento points out, “So, we have another bubble in real estate, but back in 2007, all we had was a bubble in real estate. We really didn’t have a massive bubble in the stock market. The total market cap to GDP was only 100% back in 2007. Now, it’s 191% of GDP, and, of course, you have a massive bubble in the bond market. You have $15 trillion in negative yielding sovereign debt and a U.S. Treasury at .3% in March of 2020. So, we have a triumvirate of bubbles that are all held together by this artificially low interest rate. Here’s the catch 22. . . .