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Pento: US Poised to Join ‘Zombie Club of Nations’

By    |   Friday, 04 Nov 2011 07:33 AM

The United States’ exploding debt burden will likely send us to the “zombie club of nations,” says investment strategist Michael Pento, president of Pento Portfolio Strategies.

The zombie club began with Japan, he tells Yahoo. “Greece has joined, and [the rest of] Europe will join, and America is right on the coattails of that,” Pento says.

“All of the developed world, because they’re saddled with too much debt, they’re sucking the lifeblood of capitalism out of their economies and pouring it into servicing government debt. You can’t grow and therefore you’re a zombie nation.”
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U.S. government debt now stands at almost $15 trillion, and the Congressional Budget Office expects it to total about 70 percent of GDP by year-end.

A key problem for Greece was that its membership in the euro allowed it to borrow at artificially low interest rates, Pento says. And the United States is in a similar position.

“It is our position of having the world’s reserve currency that enabled us to have these very low borrowing costs,” he says. “It’s a teaser rate. When that goes away, and it will soon, then our insolvency will be revealed.”

The United States certainly looks like a zombie nation in one respect.

The number of Americans living in neighborhoods where the poverty rate is 40 percent or higher has soared by 2.2 million, or 33 percent, since 2000, according to a new Brookings Institution study, Bloomberg reports.

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The United States exploding debt burden will likely send us to the zombie club of nations, says investment strategist Michael Pento, president of Pento Portfolio Strategies. The zombie club began with Japan, he tells Yahoo. Greece has joined, and [the rest of] Europe...
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2011-33-04
Friday, 04 Nov 2011 07:33 AM
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