Greg Hunter – Reagan White House Budget Director and best-selling author David Stockman says Fed policies over the last couple of decades hit the middle-class hard.
Stockman contends, “The Fed drove up costs, prices and wages at 2% come hell or high water. You do that for two or three decades and, all of a sudden, you are totally uncompetitive. You have the highest cost structure in the world economy, and the jobs and production migrate to where companies can find lower costs and better profits.
So, the Fed hit the economy and the middle-class, what I call fly-over America, with a double whammy. The Fed’s 2% inflation drove jobs offshore and undermined wages and the middle-class economy. At the same time, it vastly inflated and subsidized a massive gambling spree and financial asset inflation on Wall Street. . . . Not only was this (Fed) policy the enemy of MAGA . . . it also created a dangerous distortion in the distribution of national wealth.”
Stockman points out that debt is the highest ever in almost every sector of the economy, and much of it is never getting paid back. Is there a big global default coming? Stockman says, “Yes, it is very likely, and this is why it is so dangerous to be in the stock market today because the whole thing is propped up by debt.
As soon as the defaults begin to cascade through the system, there is going to be a tremendous correction. At the same time this debt was exploding from $40 trillion to $250 trillion (globally), the balance sheet of the central banks went from $2 trillion to $25 trillion. . . .
The central banks of the world have taken their balance sheets from $2 trillion to $25 trillion in roughly two decades, and all of that is one giant fraud because to buy all those assets . . . they just made it up. It was fiat credit. They issued credit . . . made out of thin air. So, what we have in the world economy underpinning this $250 trillion of debt is a massively bloated and fraudulent central banking system and balance sheet that made all this possible.”
Stockman goes on to say, “The key point is that it is all coming to an end. . . . Central banks are beginning to shrink their balance sheet for the first time in the last 20 years and not just a little bit. . . . In the inverse, the opposite effect is going to happen. Bond prices are going to fall . . . Yields are going to rise. . . . You hear from Wall Street and Fed Heads don’t worry, it’s all priced in. . . . That’s all complete baloney. It’s not priced in.
Yields are going to go up, and we are going to have a day of reckoning in terms of this whole massive artificial structure of debt that’s been created. . . . The growth rate is a third of what it was historically . . . there is no magic way out of it. So, I call it a ‘Fiscal Doomsday Machine.’”
Stockman has been touting gold as a must-have insurance policy. Stockman says, “The essential attribute of gold is that it is a contra central bank asset. It’s the one asset that can’t be influenced, manipulated, created or destroyed, for that matter, by the central banks. It’s the one asset that history has proven, without a doubt, can retain its value regardless of the mayhem and financial disorder caused by governments. . . . Gold is the alternative asset to a bubble ridden financial system that is driven by the central banks.”
Join Greg Hunter as he goes One-on-One with David Stockman, best-selling author of the brand new book called “Peak Trump.”
SF Source USA Watchdog Feb 2019