This is a syndicated repost published with the permission of The Daily Reckoning. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.
[David Stockman: The nation’s future hangs in the balance this election. That’s why I’m on a mission to send my new book TRUMPED! A Nation on the Brink of Ruin… and How to Bring It Back to every American who responds, absolutely free. Click here for more details.]
David Stockman joins Michael Covel on Trend Following Radio for his second ever appearance on the show to discuss the economy and his latest book Trumped! Click here to catch the full interview. In the episode the two economic heavyweights dive deep into topics ranging from Glass Steagall, the Clinton and Trump campaigns and even unpack the recent Deutsche Bank debacle.
Stockman when asked about the Federal Reserve and its economic largesse responded, “The idea that you can operate a giant hedge fund (trading operation) inside a bank and that it is the job of the central bank to backstop the asset base, and the financial foundation of that kind of operation does not make any sense. It is not necessary for a healthy economy. It is completely foreign to what people had in mind when the Federal Reserve was established over a century ago. It is a lesson learned from the crisis in 2008 that needs to be implemented.”
He goes on to note that, “The idea that we can’t reform and stabilize (or at least domesticate) the banking system because we need more debt is a non-starter.”
David Stockman is a two time US congressman who also served in the Reagan Administration as the Director of The Office of Management and Budget. His latest book “Trumped: A Nation on the Brink of Ruin… And How to Bring it Back” is out now and reports directly on how the US arrived at this fractured economic state, and what it must do to climb out.
When Covel asked the best selling author on the recent news from Deutsche Bank and Europe he noted, “I think the Deutsche Bank crisis is only the opening event of what’s going to be a worsening and continuing crisis in the European Banking system. This was brought even further by Draghi himself when he became convinced about all of this nonsense about “whatever it takes” mentality and driving interest rates lower and lower until he got into the “sub zero zone.” He continued expanding the balance sheet of the ECB beyond all recognition. All of this has taken, not only the ECB to a dead end, but it has destroyed whatever viability was left in the big banks in Europe.”
He went on to say that, “There are hundreds of trillions of risky assets on the balance sheets of European banks, including Deutsche Bank, that are counted as zero in their risk asset base “reckoning” because of these convenient – but nonsensical rules.
Covel pressed Stockman, asking what the fallout from election 2016 will be? Stockman left nothing on the table saying, “There will be a recession. There will be a market crash regardless of which candidate wins. All of that will then begin to raise basic questions about whether this was just a fantasy. [People will then think] Why did we believe that you could do all of the unsound things over the last two to three decades? In some ways this wild and woolly presidential campaign is just a warmup for the next phase of political and economic life in the United States – and around the world.”
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- Mathematical proof that the S&P 500 is set to soon fall by 40% soon — if you understand this, there are some simple ways to protect yourself and even make some nice, safe profits (Page 238)
- On Page 31, I’ll show you the 10 steps that whoever is elected needs to implement to save America. If most of these aren’t taken in the next administration, you’ll want to be sure to follow the instructions that I detail below them
- Five popular American stocks currently being touted on TV, in newspapers and on the internet. But on Page 377, you’ll discover why you should avoid them like the PLAGUE
- The coming U.S. revolt that Brexit foreshadows. This is must-read material BEFORE you walk into the voting booth (Page 282)
- The one simple step could prevent a 2008-type financial crisis from ever happening again. If it’s not implemented, avoid the investments on Page 251
- The reason why gold will not only retest $1,950 — but go MUCH, much higher. Page 305
- What the market will do in the weeks LEADING UP to the election. It’s a great opportunity for you to make some nice profits if you trade volatility. Page 221
- The truth about the future of fixed-income investments: Why most popular income plays will be crushed and most fixed income and government bonds are grossly overvalued. I’ll show you by how much… why the bond and fixed-income bubble will soon pop… and which particular area of this market is most vulnerable when it does. All starting on Page 261.
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