David Stockman Not Hopeful about U.S. Economy · March 21, 2012

Posted: March 22, 2012 in Uncategorized

Prophetic Intelligence Briefings

David Stockman Not Hopeful about U.S. Economy · March 21, 2012

David Stockman, former White House budget director under Ronald Reagan, who made a fortune in risky corporate buyouts has said that there is an economic disaster in the works.
Stockman, in spite of his name, doesn’t own a single stock because he is scared of another financial crisis. “Stockman suggests you’d be a fool to hold anything but cash now, and maybe a few bars of gold.”

Stockman believes that the U.S. Government’s debt-fueled spending is pumping the stock market to unsustainable and dangerous heights.
“He says the [financial] numbers for the U.S. don’t add up to anything but a painful, slow-growing future.”

Stockman is down on the U.S. economy because it is “super-saturated with debt.” There is eventually coming a time when the United States will not be able to borrow money at such good rates, and then expansion of the economy stops, he says.

He points out that even the Federal Reserve, along with many central banks of the world, is buying billions in U.S. Treasury bills at artificially low rates in order to keep the economy afloat.

“When the Fed buys $5 billion worth of bonds… which it’s doing periodically, it simply deposits $5 billion in the bank accounts of the eight dealers they buy the bonds from… The consequences are horrendous… At some point confidence is lost, and people don’t want to own the (Treasury) paper…” Stockman suggests that this will eventually drive up the cost of borrowing and bring on economic disaster.

“If the central banks ever stop buying, or actually begin to reduce their totally bloated, abnormal, freakishly large balance sheets,” Stockman said, “all of these speculators are going to sell their bonds in a heartbeat. That’s what happened in Greece.”

“Here’s the heart of the matter. The Fed is a patsy. It is a pathetic dependent of the big Wall Street banks, traders and hedge funds. Everything (it does) is designed to keep this rickety structure from unwinding.”

Stockman believes that the U.S. is facing a financial crisis far worse than the one in 2008. “When the real margin call in the great beyond arrives, the carnage will be unimaginable,” he said. “I wouldn’t touch the stock market with a 100-foot pole. It’s a dangerous place.” When asked if he is hopeful, he says, “No.”

“The present is a time of overwhelming interest to all living. Rulers and statesmen, men who occupy positions of trust and authority, thinking men and women of all classes, have their attention fixed upon the events taking place about us. They are watching the strained, restless relations that exist among the nations. They observe the intensity that is taking possession of every earthly element, and they recognize that something great and decisive is about to take place—that the world is on the verge of a stupendous crisis.” Education, page 179

David Stockman economy Q&A: Economic disaster in the works

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