Pento on Inflation, Gold, Housing, Consequences of Monetary Stimulus (Inflation)

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Mike Pento, Senior Economist at Euro Pacific Capital, was interviewed by King World News last week. He's a specialist in "Austrian Economics". Here are a few points he made (full interview).
  • Bernanke promises "unconventional" methods to combat deflation. (read Jackson Hole speech)
  • "He (Bernanke) already purchased longer dated Treasuries and he's already purchased mortgage-backed securities, I can only assume he's ready to buy stocks and real estate...." (increase Fed Balance sheet)
  • "Monetary base has gone from $800 billion to just under $2 trillion...."
  • "(Gold) is absolutely, 100%, an inflation hedge"
  • "We've had decades of a massive increase in the money supply, a massive increase in lending and a massive increase in asset price inflation (Nasdaq stocks, real estate prices). When that ends the natural occurrence for healing would be for a deflationary depression"
  • Money supply has to shrink, consumers have to deleverage (pay down debt/sell off assets)
  • "You might get a nominal increase in the major averages, you might stop the hemorrhaging that's in the housing market, but at what cost?"
  • "When you increase the supply of currency it is never EVER evenly distributed"

Hear the full interview at King World News

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