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Today Michael Pento told KWN it is time to buy the mining shares.  Pento, of Pento Portfolio Strategies, writes for King World News to explain why it’s for investors to make the move into miners, but first, he warns the economic storm is intensifying across the globe.  Pento had this to say about the situation:  “The developed world’s economies continue to suffer through a worsening condition of stagflation.  In the U.S.; the ADP employment report for April indicated that the economy gained just 119k private sector jobs in total, and lost 4k from the all-important goods producing sector of the economy.  The Non-Farm Payroll, report released on Friday, showed that the economy gained just 115k jobs, of which only 14k came from the goods producing sector.”

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Michael Pento continues:

“At the same time, productivity is now falling at a 0.5% annual rate in the first quarter of 2012.  That means there will be virtually zero growth in the goods available for domestic consumption and international trade, yet the money supply continues to grow 10% YOY—a great recipe for more stagflation.  But Europe is doing even worse than the U.S., as their recession is quickly intensifying.

Their manufacturing index fell to 45.9 in April, a 34-month low and the jobless rate in the 17-nation euro area increased to 10.9% in March, which is up from 9.1% a year ago....

Continue reading the Michael Pento piece below...

“And if you want to know the future of where the Federal Reserve is headed, all you have to do is look to the Bank of Japan.  The BOJ maintained its key policy rate at a range of zero to 0.1% at their meeting last week and eased monetary policy by expanding government bond purchases by 10 trillion yen.

They also went as far as actively pursuing inflation by purchasing 200 billion yen in equity ETFs.  Yes, now the BOJ is counterfeiting money for the sole purpose of inflating stock prices.  Ben Bernanke is most likely pining for the very same opportunity.

The perfunctory prescription offered by central bankers across the globe to rectify the economic malaise is more inflation.  But they still don’t understand the pernicious nature of massively increasing the supply of a fiat currency.

Inflation wouldn’t be such a big problem if the new money created was evenly and immediately distributed throughout the economy.  But it never is.  The wealthy and foreign creditors always get paid first and the ensuing currency collapse causes prices to surge far beyond any compensation received from income and asset price appreciation.  And the lower you go on the economic ladder, the greater the fall in the standard of living becomes.

The more significant problem for the middle class is that prices rise without a commensurate increase in assets or income to compensate.  Also, debtors don't always have a fixed interest rate attached to their liabilities.  Therefore, rising debt service expenses usually wipe out any benefits that would otherwise be derived from devaluing their debt. 
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