"The Donald Nailed It" Stockman Screams "We Are In A Big Fat Ugly Bubble"

Tyler Durden's picture

Submitted by David Stockman via Contra Corner blog,

Most of the 90 minutes last night was a waste - with both candidates lobbing well-worn clichés, slogans and sound bites at the audience and each other.

But there was one brief moment that made it all worthwhile. That was when Donald Trump peeled the bark off the Fed’s phony recovery narrative and warned that the stupendous stock market bubble it has created will come crashing down the minute it stops pegging rates to the zero bound.

“……Typical politician. All talk, no action. Sounds good, doesn’t work. Never going to happen. Our country is suffering because people like Secretary Clinton have made such bad decisions in terms of our jobs and in terms of what’s going on.


Now, look, we have the worst revival of an economy since the Great Depression. And believe me: We’re in a bubble right now. And the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that’s going to come crashing down.


We are in a big, fat, ugly bubble. And we better be awfully careful. And we have a Fed that’s doing political things. This Janet Yellen of the Fed. The Fed is doing political — by keeping the interest rates at this level. And believe me: The day Obama goes off, and he leaves, and goes out to the golf course for the rest of his life to play golf, when they raise interest rates, you’re going to see some very bad things happen, because the Fed is not doing their job. The Fed is being more political than Secretary Clinton.

Trump thereby landed a direct hit on the false Wall Street/Washington postulate that the Fed has been the nation’s economic savior. And he also elicited an almost instant defense of its destructive, anti-capitalist regime of Bubble Finance—-albeit in the guise of a “fact check” by the New York Times’ Fed reporter, Benyamin Appelbaum.

To be sure, there were actually no “facts” to check in Trump’ statement. It was simply an entirely correct judgment that the utterly unnatural interest rates engineered by the Fed have fueled an egregious inflation of financial asset prices and that “some very bad things” are going to happen when the Fed’s market rigging operation is finally halted.

Still, and opinion or not, Appelbaum emitted a barrage of harrumphing and scolding, implying that Trump is some kind of yokel who does not understand the sacred independence of the Fed:

In attacking the Fed, Mr. Trump is plowing across a line that presidential candidates and presidents have observed for the past several decades. There has been a bipartisan consensus that central banks operate most effectively when they are shielded from short-term political pressures. Indeed, President Richard M. Nixon’s insistence that the Fed should not raise rates in the early 1970s played a role in unleashing a long era of inflation — and in convincing his successors that it was better to leave the Fed to its technocratic devices.

Technocratic devices? Now that is downright balderdash because what the Fed is doing is profoundly and resoundingly political.

To wit, after 94 months on the zero bound the Fed has executed the most massive income and wealth transfer in American history. Upwards of $2.5 trillion has been extracted from the hides of main street savers and retirees over that eight year period (@ $300 billion per year). All of that and then some was gifted to the banks and Wall Street speculators.

Needless to say, a wealth redistribution that monumental in scope and capricious in impact would never see the light of day among the unwashed “politicians” that Appelbaum apparently thinks are too benighted to be involved in monetary policy. That’s because whether or not they embrace the Keynesian nostrum that saving is bad and debt is good, the nation’s politicians are smart enough to know that the sweeping fiscal transfer at the core of Fed policy would be shouted down by the voters in a thunderous chorus of denunciation and derision.

Stated differently, the politician at least know that if the Congress were to enact anything remotely similar to the Fed’s savage and relentless attack on savers and wage-earners, they would be on the receiving end of the torches and pitchforks that would descend on the Imperial City.

In fact, this wanton redistribution from savers to debtors and speculators is occurring only because a happenstance of history has put lethal financial power in the hands of an insulated, unelected monetary politburo; and one that has been taken-over by a tiny posse of delusional and power-hungry Keynesian academics, to boot.

Journalistic hacks like Appelbaum, along with Steve Liesman of CNBC and Jon Hilsenrath of the Wall Street Journal, not only exhibit the worst kind of access-driven mendacity; they also faithfully perpetuate all the myths, shibboleths and outright lies that insulate the Fed from any policy accountability whatsoever.

In the case at hand, Appelbaum claims that it was Nixon’s manhandling of the spineless Fed Chairman, Arthur Burns, in the run-up to the 1972 election that proved the case for the strict “independence” of the Fed. The  resultant decade-long inflationary wave instigated by the nefarious Tricky Dick, therefore, was the inadvertent founding event; it allegedly fostered a newly minted separation of powers doctrine that has invested the 12 members of the FOMC with virtually dictatorial powers over the nation’s financial system.

Well, yes, Nixon was the evil-doer that paved the way to our present form of mutant casino capitalism. But it was not because Arthur Burns had a propensity to bend over in the presence of great power.

To the contrary, the real evil happened in August 1971 when Nixon was persuaded by a passel of so-called free market economists, led and inspired by Milton Friedman, to trash the Bretton Woods system, and sever the dollar’s last link to anything other than the whims and economic theories of the FOMC.

It did take several decades, of course, for the denizens of the Eccles Building to realize that with the shackles of gold and convertibility removed, they were free to generate dollar liabilities at will. Indeed, the great Paul Volcker fully understood what had happened at Camp David, and strove mightily during the next decade, first at the NY Fed and then in the Eccles Building, to keep the fiat genie bottled-up via sheer intellectual discipline and willpower.

But it couldn’t last, and not just because Alan Greenspan checked in his hard money doctrines in the cloak room of the Eccles Building the first day he arrived and never reclaimed the check. What happened was that the financial press discovered that it could swap journalistic integrity for access, and the rest is now history.

What has materialized, in fact, is a cult of central bank flattery and subservience that is every bit in the emperor has no clothes modality. Not since the days of Bill Greider has a mainstream journalist even dared to suggest that Fed policies have untoward effects on the people or that its real function is to serve the interests of its Wall Street masters.

But now it’s gotten downright hideous. There is not an honest price left in any precinct of the financial system. Dangerous, unstable speculative bubbles infest every corner of the money and capital markets.

Likewise, the Fed’s fatuous policy of inflation targeting has caused the massive off-shoring of breadwinner jobs to the China Price for goods and the India Price for services. And that wasn’t the half of it.

At the same time, this sweeping and perverse job destruction policy has generated massive slack in the domestic labor markets—upwards of 180 billion hours in quantitative terms. That overhang, in turn, has suppressed nominal wage rates in the middle and bottom end of the labor market, causing wage-earners to fall increasingly behind a relentlessly rising cost of living.

And then it has added insult to injury by fueling the fantastic bubble in the stock market that Trump so accurately called-out last night. Its not just that it will soon crash and wipe-put tens of trillions of paper wealth. Actually, the real evil of ZIRP and QE has already been done.

To wit, can anyone not drinking the Wall Street Cool-Aid believe that John Stumpf and his patron, St, Warren Buffet, were actually running a bank?

In fact, the C-suites of corporate America have been turned into stock gambling dens, and corporate balance sheets have been strip-mined to fund the greatest financial engineering ponzi schemes every conceived.

The truth is, Janet Yellen is a paint-by-the-numbers academic fool who has no clue about the havoc she and her posse have unleashed on the American economy. Yet she gets away with it exactly owing to the “Fed independence” cover story so mendaciously peddled by the likes of Appelbaum, Liesman and Hilsenrath.

Thank heavens for the Donald. He knows a rigged job when he sees it, and, at least last night, was undomesticated enough to let 100 million voters hear the truth.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
NoWayJose's picture

It is easy for ZHers to overlook some of the good points Trump made while hoping he would trash any number of Hillary's evils.

FireBrander's picture

" The day Obama goes off, and he leaves, and goes out to the golf course for the rest of his life to play golf"

WTF? Is that what he has planned? Louis Farrakhan is a thinkin Obama's coming home to Chicago to get back in the "community organizing" business.

Say it aint' so; Louey gonna be pissed'er.


"...you didn’t earn your legacy with us. We put you there. You fought for the rights of gay people. You fought for the rights of this people and that people. You fight for Israel. Your people are suffering and dying in the streets! That’s where you legacy is. Now you failed to do what should have been done.”

Video just warms my heart: https://youtu.be/-8uQWIhFtEA

Check out that crazy-eyed mother fucker in the right top corner; dude is whackjed out.

auricle's picture

The liberals will disregard what the Donald said about the Fed. They don't want to understand, which they reinforce by believing that government doesn't lie to them, and if they do, it is to their benefit. 

oops's picture
oops (not verified) auricle Sep 27, 2016 9:06 PM

Karma for perpetuating the Greatest Injustice of the 20th Century. http://wp.me/p4OZ4v-19

philipat's picture

If The Fed is disbanded, that would mean that Presidents would not need to interfere. The problem we have is fundamentally the system of debt money and it needs changing. BUT we can't trust the politicians to control it unless we revert to a Gold standard to keep them in check.

PS. mofio/santafe/Aristotle of Greece/gargoyle/bleu/oops. Fuck off spammer.

greenskeeper carl's picture

Kinda like the leftists who went to jackson hole to 'fight the fed' and protest their alleged plans to raise interest rates, saying that the 'recovery' still didn't include monorities? That shit cracked me up. A bunch of SJW liberals demanding that the fed not raise rates becasue them not holding interest rates at zero would harm them, since the 'recovery' is going to trickle down to them any day now. The irony is almost too much to handle.

NoPension's picture

Talk about disregard. The BULL ELEPHANT in the room.....Hillary Clinton is sick. I'm not a doctor..but I've got eyes. And the stuff that has happened to her recently can't be explained by " the flu".

And everyone knows this. EVERYONE!! Clinton's camp. Trump's camp. The media..mainstream and alt. Obama. And anyone not blind and more sentient than an earthworm.

What's the deal? This is huge.

FireBrander's picture

Read the video comment from Thomas Devereaux:

"Now you (Obama) have the audacity to insult us further by demanding that we cast our votes for a hedonistic Clinton who is, unequivocally, on exactly the same depraved footing as the derelict leader that you are when it comes to addressing the just demands of African Americans. "

Obama " is nothing more than a outrageously compromised heartless shill that faithfully serves this racist and oppressive establishment. Therefore, if failing to vote for Hillary Clinton will be taken by you, Obama, as a personal insult and to your unscrupulous legacy as “America first Black President” then please, by all means, let poetic justice be rightfully served. For once, let all African Americans do themselves a huge favor: DO NOT VOTE FOR HILLARY CLINTON!?"

Holy shit brother! Amen!

rocknrollinhoneybadger's picture

The only community organizing Obama ever did was at the gay bathhouse.

williambanzai7's picture

Remember, we are operating at a different informational plane than the masses filling the stadiums. What they heard and saw was all good. Which is just fine.

greenskeeper carl's picture

Making a good speech in front of a few thousand people at a stadium is fine, and a neccessary skill for anyone running for office. But as good as it is to be able to fill a stadium with fans and make a good speech, you must also be able to debate, sans teleprompter. Especially against someone as flawed and corupt opponent like clinton. Making a few good points is one thing, but he missed far more than he made. As much as I despise clinton, she got the best of him in this debate. You can make the argument, as many on here have, that this is all part of some kind of plan to lull her (and her media) into complacency and then demolish them during the next debate, but that seems like an awfully convoluted way to win. When you have golden opportunities to hammer your opponent in an area they are weakest and instead wind up spending your entire two minutes on the defensive explaining something most aren't even aware of, your lose the debate. Ive never seen so many wasted opportunities.


Just to bring up a hypothetical: Lets imagine ted cruz or newt gingrich on that stage. I think both of them are  lying slime, and nothing but political opportunists, BUT, imagine what either of them would have done to killery last night. They would have destroyed her. It wouldn't have even been close. A reasonably intelligent person with zero political background should have been able to keep such a person as killery rocked back on her heels all night. Trump failed to do so. Instead, she let him get the best of him, and make him lose his temper towards the end, which will now be replayed endlessly. And no, Im not saying Ive now decided to vote for clinton, Im just saying that last night appeared to be a pretty serious fuck up.

NoPension's picture

I really think something's up. I really believe she's going to bounce out on a medical.
It's the only thing that explains what I watched last night.

And I think the game is to keep her in as long as possible. This is weird, to put it mildly.

SafelyGraze's picture

zh is more fun now that there are pop-up ads to click through in order to reach content

is there a way that maybe there could be more of them

and more frequent


FireBrander's picture

1. Install Google Chrome,

2. Top right drop down menu.

3. Select "More Tools"

4. Select extensions.

5. Search for and install:

(A) Fair AdBlocker (by STANDS)

(B) Flashcontrol


You will be AMAZED at how those two tools will clean up this site.

skunzie's picture

So true.  I've had AdBlocker for so long I forgot that was still an issue.


Pausebreak's picture

Adblocker on this page alone shows 15 ads blocked.

tarabel's picture



Or you could install Opera and not bother with all that other stuff.

It asked me one question when I installed it.

Turn off ads?

Well, duh.

Gnostech's picture

Download uBlock and Umatrix instead, far superior.

Silver Bug's picture

Donald Trump has the elites in a full blown panic mode. They Don't know how to control him, they can't and this scares them to death. A rogue billionaire is exactly what they have always feared.



FireBrander's picture

"A rogue billionaire is exactly what they have always feared"

Scares the fuck out of me too...Soros.

The world get along just fine without ANY billionaires.

greenskeeper carl's picture

"The world get along just fine without ANY billionaires."


thats an odd thing to say. So we should do away with anyone who has more than a billion dollars, or put a cap on what any single person can earn or acumulate? Im not defending any of these people that we all mention on here, but I gotta ask, what the fuck does that even mean? It sounds like a comment that was placed on salon.con and somehow wound up here.

Pooper Popper's picture

lets wake up people,are we that p.c. brainwashed???
Trump said this sexist thing,or this racist thing,,blah,blah,blah.Im not condoning it,,BUT WHO HASNT!!!!!!We all have said things about others.
"He/she who is without sin cast the first stone."
We need a LEADER and Trump is it!
All the left has is GUILT,,STOP playing their game.Lets elect Trump,
and Make America Great Again!!!

kiwigal's picture

From the comments from the main stream media I begin to wonder if we were watching the same debate! D.T. I think conducted himself in a very statesman like manner. Hillary came across as wooden and practiced and smarmy, some of the looks she gave Trump should have turned him to salt. 

max2205's picture

Amen brother    

ISEEIT's picture

The more I know...

The less I like it.

williambanzai7's picture

Downright balderdash?

How about yet another MSM shitball?

Kidbuck's picture

Who among us wouldn't like to be first in line at the pig trough?

SHADEWELL's picture

I say

The reason the Jekyll Island disaster was created, was precisely for the reason of transfering wealth to the "elite" through silent taxation under inflationary increases...J.P., and Nelson Aldrich (among the many other crooks) made damn well sure that the proloteriat never knew how badly they are getting fucked

The fucking is so bad, it continues today in which almost 100% of the dollar has eroded since the fed was enacted

These cock suckers need to be put down...it HAS reached that level..Hillary is the face of that cartel...and they will do anything to get her in...ANYTHING...and if it didnt look good for that happening, they will not think twice about using the nail gun technique on DJT

Its troubling that hillary has chosen Russia to be the boogeyman to distract people from her failing health..that fucking cunt would start the nukes flying, merely to save her politcal position....

I am blown away at how easily the american public is brainwashed from the shit that this whore says /propaganda



Txpl9421's picture

Cocksucker is one word when used As a pejorative.

tarabel's picture



Unless, of course, they are getting off on male chickens.

Which wouldn't surprise me all that much.

gregga777's picture

Why do you think that the Feral government controls public school education? To produce thinking, free citizens? Hardly.

ROTFLMAO (rolling on the floor laughing my a** off).

Zip_the_Zap's picture

The fact that you have not received at least 150 up votes for your post proves how fucked we are. The dickheads still do not get that every piece of paper they are given for their life's work is a debt instrument that loses value with every breath they take. AND what is really amazing is that the banking cartel is totally honest about it: "We are going to pay you 0% interest on the debt we force you to hold and we are going to create so much of it that we expect prices to rise 2% a year. And what do the peasants say: "Yea, but did you see that big Kardashian nipple?"

brown_hornet's picture

Love the way Stockman writes. Keep hammering on the fiat Fed Donald.

Tim Knight from Slope of Hope's picture

David Stockman is one of my heroes. His books should be required reading.

khakuda's picture

This is great. Stockman at his best.

cheech_wizard's picture


When you open this website, some numbers are pre-entered for you...

Since the Fed's inception... the Cumulative rate of inflation is 2332.9%

Standard Disclaimer: It is not enough to merely end the Fed, the buildings must be plowed under and the Federal Reseve members should be put on immediate trial for high crimes and misdemeanors against the American people.

gregga777's picture

No trials.


Walt's picture

"What has materialized, in fact, is a cult of central bank flattery and subservience" Of course it has. Every man and his dog knows of the consequences of criticizing (((them))), wherever they may be or whatever they may be doing..

allamerican's picture

what the masses heard last night went in one ear, out the other...maybe.

tarabel's picture



I hope Trump goes back to using his own (loyal) security force.

The Fed Governors have a saying:

We were just about to issue a well-reasoned white paper in response to your crazy objections...

But you seem to have suddenly died so the issue is moot.

We Are The Priests's picture

Can we just get to the torches and pitchforks part already!! We're getting a little bored with paper targets.

Swamidon's picture

Trump missed too many chances for effective one liners that would have devastated Shillary.  But all the better to lay in wait and prepare to put her in her place next time. 

JustPastPeacefield's picture

DS nails it again. Forget all the bluster and nonsense, and pay attention to the important things Trump is saying. There's plenty of substance. On the Fed and the economy, he has it exactly right. The damage being inflicted on the country by these unelected eltes is one of the defining issues of the era. It's theft on a massive scale, dwarfing anything else.   

acetinker's picture

...and, at least last night, was undomesticated enough to let 100 million voters hear the truth.

But, Mr. Stockman, not one in a hundred has any idea what he's talking about so the other 99 just think it's 'Crazy Donald' going off on a tangent- again.

Most Americans are totally clueless of the very system they live under and they like it that way.

Unless he wants to lose, and I often wonder, he has to stick to issues that his audence understands.

JustPastPeacefield's picture

It's the biggest issue of the day, so he needs to make hay with it. He needs to channel Reagan and find a way to make the issue understandable to most Americans in a few one-liners. Against the darling of Goldman Sachs, this shouldn't be too hard, especially for a guy who knows how to sell and market like a genius.  

acetinker's picture

Agree absolutely, it IS the biggest issue of the day -and probably the last 5000 years- if you want the truth of it.  But not even DT can just start spewing truth without context, it just doesn't work.

Trump's Dorothy needs a totally impartial but curious Toto to pull back the curtain to reveal a scared old man with nothing more than a steam valve and a megaphone.  Personally, I think that needs to wait 'til after 11/8.

Just my opinion.

Iconoclast421's picture

Watch out for nail guns Mr Trump.

We Are The Priests's picture

Rock On, Dude.  Operation Mind Crime rules  Dr. X has the cure.

spqrusa's picture

"The truth is, Janet Yellen is a paint-by-the-numbers academic fool who has no clue about the havoc she and her posse have unleashed on the American economy. "

Oh they know what they do... They revel in their machinations. Such is the work of Demons.