The current stock market is deemed the “most dangerous ever” with extreme valuations in stocks, bonds, and real estate, according to active money manager Michael Pento.
Pento’s 20-component model tracks market pulse by monitoring insider actions and asset allocation, such as Warren Buffett’s record cash reserves, signaling unprecedented danger.
The Fed’s interest rate cutting regime has failed to lower borrowing costs, with rates at their highest in 18 years and globally since 1998, coupled with record non-financial debt (34% of GDP).
The Fed’s balance sheet expansion from $700 billion in 2007 to $9 trillion in a few years, through fiat decree, is akin to printing money.
Pento advocates a 15% net long portfolio with hedges and shorting, while maintaining dry powder in short-term treasuries, cash, and the dollar to navigate market uncertainty.
In a recession scenario, Pento recommends positioning for stagflation with investments in energy, base metals, precious metals, and shorting long-term bonds.
Argentina’s Javier Milei drastically cut government spending by $250 billion, laying off 500,000 bureaucrats and abolishing half of government departments, leading to a 3.5% recession followed by a projected 85% GDP growth.
The US government has an estimated $500 billion in waste and fraud, plus $500+ billion in crony payouts to activists and corporations, presenting a target-rich environment for spending cuts.
The US spends $175+ billion on Ukraine, billions defending Japan, Korea, and Europe, and maintains bases in nearly every country, contributing to excessive military expenditure.
Cutting trillions without touching Social Security or national parks is possible by targeting ridiculous spending like $1 million quail cocaine studies and $10 million LGBT programs in Pakistan, which accumulate to tens of billions.
Implementing significant spending cuts faces strong opposition from the left, including potential lawfare, with media likely to focus on sacred cows like Social Security to distract from real cuts.
Politicians respond to pressure, making it crucial for citizens to exert influence to ensure promised spending cuts are actually implemented.
In the 118th Congress, members of the Freedom Caucus like Matt Gaetz and Chip Roy successfully pressured party leaders to eliminate omnibus bills and continuing resolutions.
Eliminating omnibus bills and continuing resolutions aims to prevent cramming the entire federal budget into a single up-or-down vote.
Republican leaders like Kevin McCarthy and Mike Johnson often promise drastic government cuts publicly but may find implementation challenging.
The responsibility for ensuring politicians follow through on spending cut promises ultimately falls on citizens to provide consistent pressure.
Cut through the clutter and mainstream media noise. Get free, concise dispatches on vital news, videos and opinions. Delivered to Your email inbox daily. You’ll never miss a critical story, guaranteed.