GETTY 'Central banks have created a huge debt bubble'

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Since the financial crisis a market bubble has been created by the world's central banks, which have flooded stocks in the hope of stimulating an economic recovery, according to Michael Pento, president of Pento Portfolio Strategies (PPS).



But now this bubble is set to burst, which will mean the total collapse of financial markets across the world, the Wall Street expert warned.



The predicted crash is set to be so severe that there will not be a single asset that is safe, with even the value of diamonds and sports cars completely decimated, according to Mr Pento.



He said the current financial conditions are "the most dangerous I have ever witnessed in my entire life - and I've been investing for over 25 years.The membrane has been stretched so wide and so tight that its about to burst."

GETTY Michael Pento says it's a dangerous time to be an investor

It comes as global central bank balance streets have gone from $6trillion in 2007 to $21trn today - and they are still being expanded at the pace of $200billion every month, according to Mr Pento.



The Bank of England, the European Central Bank (ECB) and the Bank of Japan are among the institutions that this year have kept printing money through Quantitative Easing (QE) programmes that involves buying the bonds - or debts - of governments and investment grade companies.



This has pushed up bond prices higher and higher, while yields - or payouts - have dropped to record lows.

GETTY All markets are set for collapse, says Michael Pento

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It means some corporate bonds - or debts - are now trading with negative yields, which means that investors are essentially paying to lend money in the hope the debt price will keep rising.



Mr Pento has now warned that when policymakers signal they are set to stop buying, which will stop bond prices rising, there is going to be a devastating crash - not just in bond markets but across all investment assets.



He said: "When the bond market breaks, when that bubble bursts, it will wipe out every asset, everything will collapse together… I mean diamonds, sports cars, mutual funds, municipal bonds, fixed income, reits, collateralised loan obligations, stocks, bonds - even commodities - will collapse in tandem along with the bond bubble burst."