Pento: “Eric, gold is the only asset out there right now that is not in a bubble. I’m looking at things like art, diamonds, Bitcoins, but most importantly I’m looking at bonds which are near record lows. The Fed has the overnight rate at 0%….
“Bond yields do not reflect the credit, currency, or inflation risks associated with owning US debt. The bubble in real estate is getting bigger. Real estate prices were up 13% year-over-year. Stocks are up over 150% since March of 2009.
Equities are in a bubble, not because of the P/E ratios being as high as they were in 1999, but because the E (earnings) in that ratio is being artificially derived, and it is unsustainable. We all know that 70% of GDP is consumption, and that inflation is based on Fed-induced asset bubbles in home prices and stocks.
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