“I am on record saying given the extent of the asset bubbles that we have today . . . household debt is at a record high. Corporate debt is at a record high, up 60%. The national debt was $9 trillion prior to the Great Recession and is now $23 trillion. Total non-financial debt is now $53 trillion, and it was $33 trillion prior to the Great Recession...
Given all these imbalances and deformations, the Fed knows we are not going to have some mild recession. If they don’t re-liquefy the money markets, the same thing that happened back in 2008 would happen today, only the stock market was only a 100% of GDP and today it is 150% or one and a half times the economy. So, the plunge in the stock market would be huge and from a much higher level. Back in the Great Recession, unemployment claims spiked. We had millions of people laid off, and the same thing would happen today only it would be much worse.”
—Michael Pento