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"Central Banks Are Out Of Dry Powder" Stockman Warns "Another Financial Crisis Is Unavoidable"
David Stockman speaks with Eric King on the looming crisis:
David Stockman:
“We’re headed for a very severe monetary crisis and period of great instability — the very opposite of what has been experienced for the last six or seven years, when these markets have been effectively tranquilized by the central banks and their massive quantitative easing and intrusion into financial markets...
But it’s going to change because we’re reaching the point where they (central banks) are out of dry powder. I don’t think the central banks have infinite power. I don’t think they can keep interest rates suppressed forever if confidence is lost.
Remember, there are trillions of dollars of bonds out there. There is something like $225 trillion of total debt in the world (public and private), and $90 trillion of that is traded in one form or another.
"They (central banks) are not going to be able to control markets indefinitely if people who are on leverage start to lose confidence in the regime and reduce their positions and liquidate their portfolios. Who is going to buy it?
If the central banks go back in in an even greater way with quantitative easing, particularly the Fed, I think it will scare the world to death and it will be totally counterproductive.
So I think they’ve painted themselves into a corner. The printing press can’t run red-hot indefinitely, and if they try it there is ultimately going to be a huge and negative reaction in what’s left of the markets.”
King World News - David Stockman - This Will Scare The World To Death
Eric King: “David, we are seeing negative rates in so many countries in Europe. Of course in the U.S. we could ultimately see negative with rates. How long can this charade continue?”
David Stockman:
“No one really knows. That’s the problem. We are in such uncharted waters. None of this has ever been tried before. None of this is sustainable. It defies every law of common sense and sound economics and finance. Therefore, you are building up a larger and larger combustible element in the system that sooner or later will blow.
This is the final spasm of a dying bull market that has been entirely fueled by central bank money printing. But if you look at the underlying trends both in the domestic and in the global economy and the outlook for earnings, everything that matters is heading south and the real global recessionary forces are just getting started."
Finally, Stockman takes aim at gold (around 7:00)
"The whole Keynesian status quo regime has to be hostile to gold.. because gold is the ultimate rebuke to central bank money-printing and central bank destruction of honest price-discovery and honest financial markets."
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Best article of the day.
+1,000
......by far !!!!
KWN? Really...?
"...and what an incredible interview that was..."
"...without further delay..."
"...joining me noooowwwww....."
Always the same pro-gold bug bullshit, always the same gold SELLING conspiracy bullshit artists (although Paul Craig Roberts and David Stockman are the exceptions that confirm the rule) and all the way down from $1900 they sing the same song...
Yeah, go ahead with the minus kudos again because KWN is always right, and even when they aren't, China will introduce a gold standard and gold will shoot to $5000-10000 an ounce... Hahahaha!
Just curious, so what are your investment suggestions? I won't hold my breath waiting for the answer ;-)
Well, fact is that ZH has been DEAD WRONG since 2009 and for example most people have missed out on a tremendous rally in the stock market.
People (or should I say ZH sheeple) have been scared into gold, and obviously that hasn't worked out so great now has it? Don't expect me to come up with a panacea for everything, but at the same time I suggest YOU to be very critical of the people who have told you that gold is the panacea to all economic turbulence, be it INflation or DEflation. Gold clearly isn't a panacea, and my guess is that the FOMC meeting in December will propably be the next kick in the teeth for gold and silver.
It's important to look at the cold hard facts and avoid emotions, wishful thinking and attacking the messenger of reality.
I own gold and I would love to have seen it go to $5000 or $10000, but let's be real: IT HASN'T and clamouring onto some KWN sales pitch story won't help.
Sorry to burst your bubble, but hopefully for you I'm wrong and "this time it will be different" and deflation won't set in.
Dream on bitchezzzz and keep on catching that golden knife with you blood stained hands....
Gold is a good hedge for economic collapse, tell me, what will all the paper (investments and fiat) be worth if it happens? that's right zero...commodities will go down of course too, but they will have some value.
bartertown
Same as it ever was
Easy money followed by crash
If economic collapse comes and there won't be any recovery but we will go back to stone age, you will have no use of gold. More likely ammo or petrol/oil or food will be currency.
If you belive there will be totall collapse going into gold is bad idea. Silver might have some since it kills bacterias, gold is useless if there is no economy based on it. Common folks don't own gold other than wedding rings and won't be able to find enough "gold money" to use it as currency.
The whole gold will go up is advertisement becouse many ppl bought it at 1500$ in 2011 and they want to get cash back. All this herding is performed with idea to drive price up. Yes i got cought in this herding also at about 1300$ and am not very happy that they got me tricked into this bad investment. Don't be fool same as me, learn from my mistake.
TREND IS YOUR FRIEND.
Current gold trend since 2011 is: Gold is going down every year, every month.
If gold goes up to 1300 maybe 1500 than you might consider buying it, Now it is fool's gold.
The problem is that the markets are no more markets than a bingo hall or a casino. Fundamentals don't count and have not for a long time. Corruption from the top has made a mockery of any predictive strategies.
Ultimately, there will be a fundamental reckoning, if the players are still alive to demand it. They may be able to wipe out enough people with market manipulations so that the only ones still standing are their team of banksters.
Two most posted words on zh since I got here B T F D and bitchez
Probably agree with that, although "we ____________ed some folks" has gotten tiresomely beaten into the dirt as well.
Maybe add Sum Ting Wong, Grandmaster Putin, and ZWO to the list as well.
Since lehman™
When I started it was "Bullish!" Somebody, inevitably, would post it on every single thread.
God, I got sick of seeing that.
Nice try at obfuscation, but the fact is you didn't answer the question, so let me answer it for you. The only you thing you can recommend besides gold and other hard assests is various forms of paper. These all amount to someone else's promise. So the bottom line is you're full of crap, but everyone knew this anyway :-)
You sound like a Martin Armstrong reader (not that it's a bad thing as he's called gold prices fairly well). I think gold is getting close to a bottom in the next few months. I will definitely be a buyer at low 900 range
We're looking for neither panacea's nor riches, but you already knew that. We're looking for insurance at cheap prices and achieving our goals in rather spectacular fashion for long about 3+ years now.
ZH posted this last December on an article
by Stockman worth rereading
http://www.zerohedge.com/news/2014-12-11/duck-and-cover-lull-breaking-st...
Stockman's starting to bore me with his prose, telling us what we already know.
I now read his first and last paragraph, and scan the rest.
After that, I scan the Comments for a gem* of additional insight, or useful links. Anything more turns ZH into a full-time job.
* There is little correlation between such Gems and the green up arrows they receive, I have found. Usually the Standup Comedians get the most votes here, which is telling in itself.
I've given my share of green arrows to some of the funny comments on ZH. As grim as things are now, and as grim as the future is, a smile or a laugh is of great value.
"* There is little correlation between such Gems and the green up arrows they receive, I have found. Usually the Standup Comedians get the most votes here, which is telling in itself."
True! People only vote green for the things they want to hear. When the ugly reality hits (example, gold tanking to $1070 and bound to sink more after the mini-hike in December) and someone reminds them of that, then out comes the knee jerk Pavlovian response to vote red. It's called confirmation bias, and truly ironic for a website and for people who claim to "think outside the box."
that was a tremendous interview.....
So what's new?
....so the dow jones propoganda average goes higher
I give him a ++ for over the top doomyness
The FEDmeister has been 'hostile to gold' since Nixon, and even laypersons with a modicum of education in 'Economics' can figure out that gold has been artificially deflated since Nixon, and especially since March 10th 2008. Stockman is right here, and we will see market mayhem in due course, but you have to factor in the fact that all the profit is in lying to you on a daily basis. And you literally vote for the liars en masse every electoral round because like all SUCKERS you want to believe the liars, and their numerous lies, because educators raised you to be passive, and docile, with regard to civic matters. And your parents dressed you funny too, I know, but it is still no excuse for being a masochist in the face of sadistic Central Banksters stealing your money through state sponsored stock buybacks, and Corporate Welfare payments from the Gubbermint.
'Laypersons'...?
Is that something like a 'person-hole cover' in the middle of the street...?
Why can't they keep it up forever? If $17 trillion in debt is not too high then who says $18 trillion will be (ignoring the tens of trillions in off-balance-sheet unfunded liabilities). It's all relative to other currencies. If the other central banks are doing the same thing the Fed is doing, then there is no where else to go. Capital will continue to flow to the U.S. because it remains relatively better than alternatives. I've been waiting too long for the inevitable collapse and am now of the view that they can keep this up much, much longer than I once thought. How am I wrong?
Your argument really is asking when will the immorality and theft, began by the US Federal Reserve, become so egretious that even the Russians and Chinese can't take it anymore. You will be wrong when either one of two events BEGIN to occur:
Yes, when the immorality and theft become so egregious "relative to alternative currencies." Again, the point is that there is no reasonable alternative currency available to the rational investor. Are China and Russia is better shape than the U.S.? I don't think so. The central banks and central planners have taken over worldwide. What economy out there is being managed in a responsible way? Who's not printing money recklessly? Do you see any sovereign balanced budgets out there? What currency is truly viewed as preferable to the USD? With the Fed ready to raise rates do you see that changing? Maybe a commodities-based country/currency once inflation takes off as it inevitably will, but I don't see that coming about in the currently depressed economic environment. Perhaps once WWIII gets started and the demand for resources kicks inflation into hypergear.
well there's still wet powder
The insane market can keep going longer than you can say solvent - that is what I keep reading. It seems to be the absolute truth.
I don't have any idea when things will fall apart but it will happen within the next year, maybe right after the next election...as they want to drop the bomb on the next republican president.
Just stay calm, work till you can't and prepare as best you can.
maybe the tooth fairy will save the world?
just came across this here: http://fox6now.com/2015/11/23/chicago-is-on-the-tipping-point-leaders-ur...
Isn't Chicago the new home of the FED? #blacklivesmatter for weeks, now fear mongering in the media in advance? Is the FED out of options? Let's see ...
meanwhile the clock (fake) bomb boy is suing for $15 million....hmmmmmm
how can this guy be trusted when he says : this is the final count down...?
How can you trust any of these former scammers for having understood the power of the scam and its ability to suck in the new capitalists of the whole world ?
Never ending trail of people saying : MONEY HONEY ! I wanna piece of the acton.
So where is that asymptote we keep hoping will bring down the casino?
Europe can't agree? Sure they can, behind closed doors, in private meeting rooms inside lavish buildings behind guarded walls, with private signs over the doors. Sure they can agree, just you and me won't ever get to see, even know. They do this kinda stuff all the time.
How do you think the refugee policy was created? There are meetings being held all the time, agreements made without our consent. And then these politicians retire, get promoted or paid to talk in some other circus.
Easy isn't it.
Here are some signs of a coming recession.
1. Business loans for M&A not CAPEX.
http://www.zerohedge.com/news/2015-10-15/there-goes-final-pillar-us-recovery-loan-growth-paradox-explained
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Fed sees 2 bubbles
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
o Commercial Property higher than pre-2007 level.
http://nreionline.com/finance-investment/cre-prices-are-now-officially-above-pre-recession-peak
o Global Corporate Debt Market hits $5 trillion.
http://fn.dealogic.com/fn/DCMRank.htm
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
You know who agrees with Stockman on this issue? Ralph Nader. You know who they both agree with on this issue? Bernie Sanders.
Not true. Sanders has no clue about money printing. he is just a typical NYC cheesepope that moved to VT. he has to say that he hates the Banks ... but he doesn't. Check out his net worth and how he made his dough.
Smarten the fuck up and do some research.
I admire Mr. Stockman's frustrated theologian's moralism and sense of rationalist justice, and he is likely right about recession-like conditions; but he is wrong that the central banksters (and TBTE Rockerfeller-Rothschild bankster syndicate's) are "out of powder"; they will print, if necessary, 100% of bank loans, or even 100% of GDP or equity market cap, including printing to buy bank and insurer stocks, ETFs, and gramp's 1930s kitchen sink in the corner of the barn.
Cracks me up that folk bicker about the price of this and that in the future. We all seem pretty sure that the current system has fucked any chance of real price discovery, given that seemingly every commodity and market is manipulated. Can it continue on its current perverted course without some correction, no way. When and how that manifests, well, everyone would be a winner if we had crystal balls. So buy what makes you happy, invest in what makes you feel secure, and hopefully preserve some "wealth" Hopefully through all this madness we can ditch the banks and create a new paradigm where the barter transaction is void of scum. Fingers crossed
Cracks me up that folk bicker about the price of this and that in the future. We all seem pretty sure that the current system has fucked any chance of real price discovery, given that seemingly every commodity and market is manipulated. Can it continue on its current perverted course without some correction, no way. When and how that manifests, well, everyone would be a winner if we had crystal balls. So buy what makes you happy, invest in what makes you feel secure, and hopefully preserve some "wealth" Hopefully through all this madness we can ditch the banks and create a new paradigm where the barter transaction is void of scum. Fingers crossed
Cracks me up that folk bicker about the price of this and that in the future. We all seem pretty sure that the current system has fucked any chance of real price discovery, given that seemingly every commodity and market is manipulated. Can it continue on its current perverted course without some correction, no way. When and how that manifests, well, everyone would be a winner if we had crystal balls. So buy what makes you happy, invest in what makes you feel secure, and hopefully preserve some "wealth" Hopefully through all this madness we can ditch the banks and create a new paradigm where the barter transaction is void of scum. Fingers crossed
Cracks me up that folk bicker about the price of this and that in the future. We all seem pretty sure that the current system has fucked any chance of real price discovery, given that seemingly every commodity and market is manipulated. Can it continue on its current perverted course without some correction, no way. When and how that manifests, well, everyone would be a winner if we had crystal balls. So buy what makes you happy, invest in what makes you feel secure, and hopefully preserve some "wealth" Hopefully through all this madness we can ditch the banks and create a new paradigm where the barter transaction is void of scum. Fingers crossed
Cracks me up that folk bicker about the price of this and that in the future. We all seem pretty sure that the current system has fucked any chance of real price discovery, given that seemingly every commodity and market is manipulated. Can it continue on its current perverted course without some correction, no way. When and how that manifests, well, everyone would be a winner if we had crystal balls. So buy what makes you happy, invest in what makes you feel secure, and hopefully preserve some "wealth" Hopefully through all this madness we can ditch the banks and create a new paradigm where the barter transaction is void of scum. Fingers crossed
The only thing that is unavoidable is massive money printing, there is no powder it's all 1s and 0s. Watch what comes out of the Nov 30 Fed meeting. We're going to the moon Bitchez!!!
Hey you don't have to tell me five times!!
I wonder sometimes.....
Does Stockman over estimate the quality of the current crop of hedgefund MBA assholes?
These current puppies have only ever seen falling rates....they can't conceive a world where rates are rising.
Dave, bless his heart, thinks there is still common sense out there......is there?
Squid