This Will End In A Deflationary Depression | Michael Pento

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**Michael Pento** (0:59)
After however long this sojourn into chaos lasts and reflation and disinflation, that carnival ride, whenever it ends, I think it ends in disinflation, then deflation and depression. And I said D and I meant it.
It's depression, not recession. And I think I can prove that in this interview.

**Adam Taggart** (1:30)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart.
Welcoming you here for a very special discussion with the great Michael Pento. Michael, how are you doing?

**Michael Pento** (1:40)
I'm doing fine. Always great to be with you, Adam.

**Adam Taggart** (1:43)
Well, it's always great to be with you, my friend. And I deliberately selected you as the first person I was going to interview when I got back from my vacation, which I just did, folks. I took a week off. I really pretty much was hands off the computer out in the wilds. It was out in Glacier National Park with my wife, celebrating both my birthday and our 25th and upcoming 26th wedding anniversary.
It was absolutely phenomenal. But as I got back, Michael, I learned that July really ended as a painful month.
Here's some stats about it. It was Nasdaq's worst July in 22 years. Bonds had their biggest July yield spike since 2005, and oil had the biggest July price increase in over 30 years. Michael, I'd like to talk to you about what's driving all this. Is this just a mid-year pressure release before prices resume climbing, or is this some signal that momentum may be starting to roll over here in the markets? Most importantly, what does all this mean for investors? What positioning makes the most sense given this environment? So folks, like I said, we're very fortunate to have Michael Pento, founder and CEO of Pento Portfolio Strategies, here to make sense of it all for us. Michael, are you ready to dive in?

**Michael Pento** (3:02)
I sure am. First of all, happy birthday and congratulations on your beautiful marriage of 26 years.

**Adam Taggart** (3:08)
Thank you. Thank you so much. I'm a very lucky man. That's all I can say. I'm just trying to follow your lead, my friend, living a very rich life. Yourself there in Florida, in the great state of Florida now.
Lots of questions for you, Michael, about everything I just listed off. But if we can, let's just get to the meat right away. One of the things I appreciate most about you is your very structured approach to investing, and you have a proprietary model, 20-point model that you've put together over the years.
No matter what Michael Pento feels like when he wakes up in the morning, what he actually does is based upon what the structured process of his model tells him to do. Your model, if I remember correctly, has five different stages. What stage are we in right now according to it?

**Michael Pento** (3:58)
In all honesty, and I like to be as candid as possible, it's been a very challenging year for anyone who runs a long short inflation deflation portfolio. There's not many of us out there. I think the first one to create it, but usually these cycles, Adam, take the duration is like months and years. Model is the business cycle, which is a function of fiscal and monetary policy.
But since February 28th, the cycles have been very compressed, and they've become a matter of weeks and even days sometimes.

**Adam Taggart** (4:41)
And folks, February 28th being when the US invaded, or not invaded, but went to war with Iran.

**Michael Pento** (4:47)
Correct. And since then, I think someone did account, there has been 30 times since February 28th, where we have vacillated between, we are going to bomb Iran into smithereens, back to the Stone Ages, and then we are on the precipice of a gigantic, humongous deal.