Debt Crisis To Trigger Recession - Then Stocks Crash and GOLD Soars: Michael Pento

Commodity Culture Sep 29, 2026 22:50

Summary

The guest argues US debt at 720% of federal revenue leaves no room to cut rates, so bond yields keep climbing.

Gold's pullback tracks rising real interest rates, not a broken long-term case; he expects the recession to reverse it.

He sold gold miners on Friday, saying the sector amplifies gold's moves and should suffer until recession is manifest.

Long Treasuries may no longer defend a recession portfolio: he projects a $6 trillion deficit that pushes yields higher.

Japanese and German rates leaving the zero era removed the anchors that had been holding Treasury yields down.

Top takeaway The guest argues the debt crisis sets up a recession he expects around 2027, and says it would be the most intense US recession or depression on record given record debt-to-GDP plus private credit and junk bond loan books that he expects all to go into trouble.
He says gold and gold miners face further damage from rising nominal and real interest rates, and that he sold his miner holdings on the Friday before this September 29, 2026 recording, intending to use that weakness to buy the sector.
He stays constructive longer term on the miners, expecting to move in heavily once the recession is manifest and the AI spending and credit bubbles collapse, describing miners as a leveraged play on gold.
He says only an outright recession would pull long-end Treasury yields down, and expects any rally to be brief, with annual deficits reaching roughly $6 trillion as stabilizers kick in before yields go much higher again.
He expects the Fed under Warsh to be too reluctant to restart QE, making the response too little and too late before trillions of dollars are printed, and calls the resulting environment hyper-stagflation for many years.

Top takeaway The guest says that under Warsh the Fed is already slowing the growth of Federal Reserve credit creation, which means more debt issuance has to be priced by the market rather than absorbed by the central bank.
He adds that Warsh has said QE was too intense and too long, and expects him to be reluctant to launch another QE program.

Top takeaway The host notes that Bessent announced a doubling of Treasury buybacks, potentially more, effectively a form of yield curve control, and asks how the Treasury cash account and any operation-twist style effort are going.
The guest's verdict is that it is not working, saying yields are much higher than when Bessent first bragged about it, and he expects the wider government response to rising yields to be slow.

Top takeaway The host cites a recent Rickards interview in which he was not too concerned about rising Treasury yields, pointing to the double-digit yields of the early 1980s as precedent.
The guest disputes that reassurance, arguing markets respond to the rate of change rather than the absolute level of rates, and that the US debt situation today is completely different from the early 1980s.