My notes from an interesting interview of Michael Pento on Kingworld News. I am also attaching the link. He is definitely emotional about what he sees happening. A good listen in my humble opinion.

12/23/10 Michael Pento at Kingworld News

· Food companies like Kraft will have to in 2011 pass along their costs to consumers or risk their future. They have so far been reluctant to do so.

· Looks like all of the retail sales increase is due to inflation

· Major story in 2011 will be the rise of interest rates and its impact on financing of public and private debt – interest rates are spiking which points to Bernanke’s failures.

· Pento said he is worried about an out and out crash of the market.

· Bernanke out and out lied when he said in an interview that he was not printing money.

· This is a reason why interest rates are rising. We had the largest red ink month ever in US in terms of budget deficit in November. We are losing currency credibility, credit risk credibility; we have real inflation of over 20% in commodities (CRB) in just a handful of months. By adding to unemployment benefits we are just adding debt to debt. (US doesn’t even have a budget surplus in April anymore when all the tax revenue comes in!)

· It will be devastating to consumers and we are about 3 years from being a Greece or Ireland.

· Rising interest rates will result in slower growth in US and globally, continuation of commodities prices and those companies that pull them out of the ground.

· Recommends that people continue to buy gold even though there has been a recent pullback due to rising interest rates. This caused a temporary rise in real yields which caused a drop in commodities and in particular in the Vanguard Gold Fund.

· In 2011 we will see nominal interest rates rise but inflation will rise as fast or faster than nominal increase in rates which means that you will have a fall in real interest rates which means that “you have to own precious metals, base metals, energy, agriculture commodities but in particular gold.”

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/12/23_Michael_Pento__GOLD_%26_2011.html