David Stockman Blasts, Brace For "The Explosion Of The Mother Of All Bubbles"

Tyler Durden's picture

David Stockman has never been shy of expressing his true feelings (about Bernanke's "Born Again Jobs Scam", Calamity Janet Yellen, Obamacare's resentment-encouraging rollout, and the entire Keynesian state wreck ahead). But this time, he aims his acerbic ire at the "markets."

During a brief interview on FOX Business, the author of The Age of Deformation exclaimed "There’s no one in the stock market today except drugged up day-traders and robots... This is utterly irrational," adding that "we're in the fourth bubble inflated by the Fed in this century... but now we have the greatest, mother of all bubbles."

The blame (and benefactors) are clear, he blasts, "how could someone in their right mind believe that you can have interest rates... at zero for nine years?... That is the greatest gift to the speculators, to the 1%, to the leveraged traders, to the carry trade ever imagined!" He concludes, "we're almost on the edge of another explosion at the present time."


In just over 3 minutes Stockman takes it all on...



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Ned Zeppelin's picture

Stockman should be revered by ZHers. Read his book and you will connect all of the dots.

It is worse than you think.

LetThemEatRand's picture

I don't agree with everything Stockman has to say, but he defected from the Reagan camp when he figured out what was really going on and that it had nothing to do with what was sold to voters, and he's a hero for that.  

Bay of Pigs's picture

There were a lot of Neocons and assorted assholes with the Reagan Administration. Cheney, Bush Sr., Shultz, Weinberger, Baker, Meese, Perle, Wolfowitz just to name a few.

Not sure when Stockman woke up, but he couldn't have missed that coming trainwreck seeing it from the inside.

Chris Jusset's picture

The US has had ongoing ZIRP & QE for five consecutive years ... utterly unprecedented ... and the Fed deliberately did this to reflate the old bubbles in real estate and the stock market, as well as blowing new bubbles in junk bonds and Treasuries.


The US has become a complete bubble economy.

LetThemEatRand's picture

I don't disagree with you, but it was Greenspan who got this party started.  

DanDaley's picture

What about the Fabian socialists (Dexter White and JM Keynes) back at Bretton Woods...that seems to me to be the linchpin...other than Jekyll Island.

samsara's picture

Google "Rhodes CFR Fabians"

That'll start you.

Manthong's picture

hmm.  curious as to how few in this forum understand the above...

new game's picture

so i should hold off on next gold purchase?

heh heh


mofo of all bottoms a comin...

new game's picture

restated: cash is king til the king is beheaded...

timing is a bitch, bitcheez

Keyser's picture

Thanks for the link above... I find this quote from Cecil Rhodes quite telling it's avarice...

"Why should we not form a secret society with but one object, the furtherance of the British Empire and the bringing of the whole world under British rule, for the recovery of the United States, for making the Anglo Saxon race but one Empire? What a dream, but yet it is probable; it is possible."


Bendromeda Strain's picture

Hey, one other thing Bill Clinton did was to bring Quigley's "Tragedy & Hope" into (semi) mainstream discussion. The pdf is free online.

economics9698's picture

The Fed cannot do anything about ZIRP even if it wanted to without selling a few trillion in paper, which of course would cause the mother of all crashes.

The Fed lost control of interest rates when banks parked trillions in excess reserves at the Fed starting in 2008.  The excess reserves will stay parked there available to be loaned out at 0.05% until inflation or interest rates are more lucrative, see statement above.

Four paths, austerity, war, bankruptcy, or inflation.  The Fed will keep pushing until we get Venezuelan style inflation.  One thing people forget is inflation is a chance for the rich to get even richer.  In Germany (1923) people got rich overnight who could buy and sell.  The cockroach classes like Bernanke and Yellen probably look forward to the days of high inflation, just another buying opportunity for them. 

You have to understand these people think your life is a waste of space and resources and the sooner they own everything you have and can starve you to death the better for them.  Germans saw this in the 1920 in Germany and in the Ukraine, 1932-33, Holodomor. High inflation rates would be welcomed by these sick bastards.


The sooner you stop thinking these people are rational the sooner you understand them.  Cockroaches looking for food.

Freewheelin Franklin's picture

“So you think that money is the root of all evil?” said Francisco d'Anconia. “Have you ever asked what is the root of money?"

When I read that speech, and then think that Greespan was part of that "inner circle", I think to myself, someone should have rammed a telephone pole up his ass.

Deo vindice's picture

One of the most misquoted verses of the Bible is "the LOVE of money is the root of all (kinds of) evil".

Money per se is not evil. It is the inordinate lust after it that drives men to wicked acts. That is evil.

max2205's picture

Trillions lost/stolen from savers....it will be histories takeaway

Keyser's picture

In another interview, Stockman calls for the USD index to fall to between 50 - 56 after the reset. 

Watauga's picture

The root of all evil is "self."  Anything that is of the self is not of God, and anything that is not of God is mammon, and man cannot serve both God and mammon.

And just as importantly, Christ said, "I am the Way, and the Truth, and the Life; no one comes to the Father but through Me."  The if you believe in Christ and are baptized, you are not of mammon, but of God.

This is everything one needs to know about life, history, reality, and eternity. 

Deo vindice's picture

@ Watauga - if you believe in Christ and are baptized, you are not of mammon, but of God.

I guess the dying thief who believed in Jesus while they were on their crosses was lied to by Jesus then when He told him he (the thief) would be with Him (Jesus) in paradise? (He never got baptized)

Baptism is indeed a matter of obedience, (an evidence of faith in Christ), but it is not a means of being saved, or "of God" as you put it.

Edit: last sentence for clarity.

Tall Tom's picture

I must disagree with you in that it was Paul Volcker who started this PArTy. Before Paul Volcker "saved the day" back in 1979 it was Mr. Volcker who engineered the decoupling of the US Dollar from Gold back in 1971, before he was ever the Chairman of the Federal Reserve..


That was the beginning of this insane 42 Year experiment to have no Fiat Currency in the World backed by Gold...a supply which is not easily manipulated.


With the US Dollar backed by OPEC Oil it was easy to strengthen or weaken the currency by having our friend Saudi Arabia turn up of back off of the spigot. Conversely we could restrict the creation of new debt or increase the creation of new debt. The value, the purchasing power, of currency was too easily manipulated. 


Did you know that we had Saudi Arabia in the middle 1980s open the tap to full, ensuring $10 Oil, thus ensuring the Bankruptcy of the former Soviet Union? The USA bluffed the USSR into heavy Military Expenditures with implementing an unworkable Strategic Defense Initiative, "Star Wars", Program and depressed the price of the most marketable of assets which they had for sale, Oil, accounting for a large percentage of USSR GDP.  That is how America prevailed in victory in the Cold War.


All Wars are Economic...Hot Wars, Cold Wars, Proxy Wars, Currency Wars, Trade Wars, Culture Wars, Drug Wars, etc. The strategy is that you destroy the combatants will and capability ,as in their ECONOMY, to engage in Warfare. If you are successful then you emerge victorious. But there are associated costs with victory. It just costs the Victor less than it does the opponent, the Victim. (Remember Latin?)


With the discipline of Gold removed the Central Bankers had free reign and no discipline. We are just now starting to reap the just "rewards" of this Grand Fraud. THe ParTY iS OvER. Alan Greenspan was the Chairman of the Federal Reserve, Volcker's protege, who CONTINUED VOLCKER'S POLICIES.


The concept which so many fail to grasp it that Administrations are just CONTINUATIONS of previous Administrations and are in essence no different. This applies to Presidential Administrations. This applies to Federal Reserve Chairmanships.


Janet Yellen will continue Ben Bernanke's destructive policies. I will not expect anything different. In fact I cannot understand any reason behind expecting anything different.


It is evening in America.

validate's picture

It's a little early to establish, with certainty, the real victor in the cold war. One particularly interesting aspect of the folding of the USSR is why did the City remove its support. I think that the USSR ceased to be an adequate model of socialism, with  the USSA moving so close to its socialistic destiny. Kruschev, remember, was a Stalinist's Stalinist and Breznev not nearly so clever, leading to a totaly new use of the Glasnost concept with Gorbachev.  Sombody with mega-power is now shining a powerful, favorable, spotlight on Putin. Who knows what will happen when the fruit bowl is upset. Whose population is better prepared for the NWO ?



Bendromeda Strain's picture

If Saudi oil was the linchpin of the Cold War, then apply this thesis to Russia's gas stranglehold of Europe and Putin's 'nyet' to Bandar's gambit on Syria. It would seem the shoe is now on the other foot.

ToNYC's picture

SeaTac minimum wage fight in ballot box vs. Reagan's Air Traffic Controllers strike firings for getting the working and living wage party started. Greenspan just brought the financial crack like Reagan used in mid-80s. Nixon went to China in 1972 for cheap labor, to transfer the benefits of democracy and skim the cream from the homies.

ToNYC's picture

Takes years of ZIRP spinning  to turn dross into gold and re-present it to the customers as the best dirty shirt.

samsara's picture

Not unlike Craig Paul Roberts.

Seen the inside, Drawing their.own conclusions.

Plata con Carne's picture

Ron Paul did the same, when all the Reganomics bullfunky started up.

scrappy's picture

Who cares?


Bigger fish to fry first.




This is ZH right?


Here you go - like all info - discect it.




He never gets to solutions though.


We will have to.




Waiting and watching.


Scrappy out.





Tall Tom's picture

Thanks for the link. Just finished it. Amazing.

Freddie's picture

I am so glad I got a 1,000 shares of Tweeter today before the bubble bursts. I wanted to get in on the ground floor of this social media boom.

disabledvet's picture

i was kinda bummed out when i saw my (insert high beta annihilated name here) transmorgified by Twitter. I'd laugh if the Nasdaq headed straight back to 1000 again with Twitter blasting away one from record high to the next. The VinkleVoss twins will not be denied!

dcohen's picture

Mr Yellen is different, she will know what to do to avoid another deflated bubble.

A Lunatic's picture

Mr. Yellen will crawl out of her slimy cubicle, see her shadow and declare 4 moar years of the same old shit.....

smlbizman's picture

4 moar years of...new material...mr. yellen...(tff)...just made that up ..(to fucking funny)...going straight to the ipo dept. with that one..get it while u can..is that why my new and improved oblowmecare will pay for new tits for me, but not my wife....shit writes itself.....mr. moe yellen, knuck,knuck knuck......

andrewp111's picture

Mr. Yellen will just slam the pedal to the metal until there is no moar government bonds to buy. Then she is stuck unless she can get away with violating the law to buy non-Federal bonds, and unless she can the whole system blows up.  This incidentially, is why Obama really wanted Summers. Summers is brash enough to buy Munis and Junk Bonds and to dare anyone to try and stop him. Yellen is more likely to simply buy up all the Treasury, Fannie, and Freddie bonds in existence, but not expand to Munis. So, just as GreenSpan left 2 years before his real estate bubble imploded, Bernanke is leaving 1-3 years before his Mother Of All Bubbles implodes. If Mr. Yellen can expand the Fed's mandate to buying Munis, Corporates, Junk Bonds, and Stocks, she can probably get an additional 4 years and a second term out of it before the final implosion. After that it is Game Over.

And when the bubble finally implodes, it will go so fast that no one will get out. All an outside observer will see is a widening of spreads and then suddenly the entire interbank payment system seizes up. The bankster insiders of course will see the collateral calls that force them to pull the plug.

NoDebt's picture

"Mr. Yellen will just slam the pedal to the metal until there is no moar government bonds to buy."

They'll make more.

Ghordius's picture

? andrewp111, I don't understand your "unless she can get away with violating the law to buy non-Federal bonds"

as far as I understand, the FED has "stuck the pedal" into buying securities, one trillion per year, half of them US Treasuries, and half of them Mortgage-Backed Securities

I repeat: half of QE3 is already spent every month in support of the US housing market. I presume lots of Fannie and Freddie bonds


this reminds me that in general most Americans are not aware how radically different the FED's balance sheet looks, compared to the other 110 central or national banks of the world. just look up FX reserves, for example

lasvegaspersona's picture

joke yes?

you know she was cloned from Bernacke's obdulla longata right?

AlaricBalth's picture

But mama says Yellen is ornery because she has a brain but can't figure out how to use it.

Medulla Oblongata-The Water Boy

Plata con Carne's picture

More likely cloned from his foreskin.

ebworthen's picture

I thought she was cloned from a hairy mole on his ass?

Bay of Pigs's picture

Irrational exuberance?

Where have we heard that before?

TheBoyPlunger's picture

I got plenty of Chef Boyardi canned ravioli and .22lr


Let's get this party started !

10mm's picture

I hope you have just a little more than .22lr. Not that i want to get hit with a super soaker let alone a bullet.

Oldwood's picture

Try the RockRiver 22 TCM. A 22 cal bullet with a bottleneck 9mm size casing. Wicked loud and will penetrate 1/4" steel. Utilizes a 1911 frame (typical to your standard military issue 45 semi auto) and has an interchangeable 9mm barrel so you have some alternatives in ammo. Nice pistol and ammo 50 cents/round.

Upswaller's picture

Don't fall for the one trick hoss, Buster.  The stats on 22LR are quite impressive.  

.45, .308 and 30'06 are fun, but withering semi fire into a gnat's eye can be had by 22LR. 

Pith, anyone?

Oldwood's picture

Sure, everyone knows that size doesn't matter. Besides, before long you will need a permit to open carry a bucket of rocks.