"It's only a question of time before the central banks lose control," David Stockman warns a shocked CNBC anchor, "and a panic sets in when people realize that these values are massively overstated."
The outspoken author of The Great Deformation rages "the Fed is exporting its lunatic policies worldwide," as central banks around the world have followed the Fed's lead, "for either good reasons of defending their own currency and their trade and their exchange rate, or because they're replicating the Fed's erroneous policies."
If one cares to look, Stockman adds, "there are bubbles everywhere," citing Russell 2000 valuations of 75x LTM earnings as an example, "that makes no sense. It's up 43% in the last year, but earnings of the Russell 2000 companies have not increased at all." This is dangerous, he strongly cautions, "I haven't seen too many bubbles in history" that haven't ended violently.
"I'm not drinking the Kool-Aid..."
"Central banks all over the world have been massively expanding their balance sheets, and as a result of that there are bubbles in everything in the world, asset values are exaggerated everywhere."