Good for Stocks, Better for Gold: Bernanke's "Stuck at Zero"

Good for Stocks, Better for Gold: Bernanke's "Stuck at Zero," Michael Pento Says

Yahoo Tech Ticker - Feb 12, 2010 12:50pm EST by Peter Gorenstein

Once again, Beijing's efforts to cool their red hot economy are causing a sell-off on Wall Street. For the second time in a month, China said it would require banks to increase reserve levels thereby curtailing lending.

The news quickly killed Thursday's one-day rally and once again raised concerns the recent market sell-off is in its early stages. "The global economy is slowing," says Michael Pento, chief market strategist with Delta Global Advisors, pointing to stagnant commodity prices. "That's why I think, we're having a double-dip recession here in the United States and a slowdown, unlike what the IMF predicts, a slowdown in global GDP."

Though it's a near term headwind, Pento believes that economic weakness could actually spark a rally later this year, once the market realizes Federal Reserve Chairman Ben Bernanke, contrary to recent posturing, will keep rates "stuck at zero."

Low rates will kill off the dollar rally and "be positive, in nominal terms, for the major averages," says a confident Pento.

But, if you want to make real money, Pento suggests buying hard assets and precious metals, namely gold. He tells Aaron in this clip, he plans to buy back half of the precious metals assets he sold in November, once Bernanke re-starts quantitative easing in the second half of the year.

If you are an equity buyer Pento recommends PennWest Energy Trust and Chilean fertilizer maker, SQM.

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[Motoicon]

Time to get back on the Silver horse......This guy did a good job of explaining what is happening and why. Just a matter of time before gold and silver resume their rise.

[donniebrasco24]

most of those euros will go into gold and silver other than dollars

[TheJonasFrimodt]

pento is probably smartest man on the planet

[TheBlitz1]

notice he says if you want REAL returns you invest in precious metals and tangible assets, if you want REAL returns. Before that he said QE2 would be "positive in nominal terms" meaning the excess liquidity that leaks into the market pumps up prices but the liquidity is not real value its just inflationary.

[ashkenazimindcontrol]

since the Federal Reserve began in 1915, the dollar has lost 98% of its value, that is truely a crime against the working people.

[itubeutude]

he will in march.