Stockman: "After March 15 Everything Will Grind To A Halt"

Tyler Durden's picture

Two weeks after David Stockman warned that "the market is apparently pricing in a huge Trump stimulus. But if you just look at the real world out there, the only thing that's going to happen is a fiscal bloodbath and a White House train wreck like never before in U.S. history" and exclaimed that, when looking at markets, "what's going on today is complete insanity" he is back with another interview, this time with Greg Hunter of USAWatchdog in which he, once again warns, that a giant fiscal bloodbatch is coming soon, and urges listeners to pay especially close attention to the March 15, 2017 debt ceiling deadling, at which point everything could "grind to a halt."

As Greg Hunter writes, former Reagan Administration White House Budget Director David Stockman says financial pain is a mathematical certainty. Stockman explains, “I think we are likely to have more of a fiscal bloodbath rather than fiscal stimulus.  Unfortunately for Donald Trump, not only did the public vote the establishment out, they left on his doorstep the inheritance of 30 years of debt build-up and a fiscal policy that’s been really reckless in the extreme.  People would like to think he’s the second coming of Ronald Reagan and we are going to have morning in America.  Unfortunately, I don’t think it looks that promising because Trump is inheriting a mess that pales into insignificance what we had to deal with in January of 1981 when I joined the Reagan White House as Budget Director.”

So, can the Trump bump in the stock market keep going? Stockman, who wrote a book titled “Trumped” predicting a Trump victory in 2016, says, “I don’t think there is a snowball’s chance in the hot place that’s going to happen. This is delusional.  This is the greatest suckers’ rally of all time.  It is based on pure hopium and not any analysis at all as what it will take to push through a big tax cut.  Donald Trump is in a trap.  Today the debt is $20 trillion.  It’s 106% of GDP. . . .Trump is inheriting a built-in deficit of $10 trillion over the next decade under current policies that are built in.  Yet, he wants more defense spending, not less.  He wants drastic sweeping tax cuts for corporations and individuals.  He wants to spend more money on border security and law enforcement.  He’s going to do more for the veterans.  He wants this big trillion dollar infrastructure program.  You put all that together and it’s madness.  It doesn’t even begin to add up, and it won’t happen when you are struggling with the $10 trillion of debt that’s coming down the pike and the $20 trillion that’s already on the books.”

Then, Stockman drops this bomb and says:

“I think what people are missing is this date, March 15th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash.  We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash.  Then we will be in the mother of all debt ceiling crises.  Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

Stockman also predicts very positive price moves for gold and silver as a result of the coming budget calamity.

There is much more in the video interview below in which Greg Hunter goes One-on-One with David Stockman.

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Zero_Ledge's picture

But, but, but, Trump said the debt went DOWN by $12B in his first month.

gruden's picture

Under normal circumstances I'd agree, but the key difference this time is Trump is the president and the Deep State hates him. If they can shut down the gov't and make Trump look like that bad guy who is unable to negotiate Congressional support they will be happy to let him twist in the wind.

And it will be punishment to the public for voting Trump into office.

So yeah, they could just renew the credit card and keep spending, but I don't think they will this time, at least not without damaging Trump and people in the flyover states as much as possible. There is more at work this time and the Deep State will want to re-establish firm control.

new game's picture

your thoughts or regergetation of zh read? be honest...

fucking mindless parrots around here.

weburke's picture

Core flaw in his thinking is ......... doesn't know that the reserve currency. MUST go into debt.

Creative_Destruct's picture

Yes, reserve FIAT currency that the rest of the world REQUIRES to service it's dollar denominated debt, See:

https://en.wikipedia.org/wiki/Triffin_dilemma

(About 60% of world debt is dollar denominated, if memory serves.)

There is NO WAY to NOT raise the debt ceiling without severe consequences beacause we have been commitied by the Triffin Dilemma since Bretton Woods to supply the world with dollar stock to (unwisely) support economic growth fiananced by massive quantities of debt, in order to promote political desires and stability.

(Aside: that growth would NOT  have gotten unsustainable IF we had a gold-backed non-fiat currency; necessary discipline would be inherently imposed by the limitations of gold supply.)

If the debt ceiling is not raised, the entire world economy will collapse. Destruction would occur, painful but perhaps invitable and needed. I leave that up to the individual to judge if that potentially "creative destruction" is an ultimately good or bad thing.

Troy Ounce's picture

 

Why is that for us to decide if it is good or bad?

It will happen in any case! Today or over 20 years!

If they only repaired everything after 2008. But no. The stupid and cowards were in charge (read: historically challenged and short term thinkers).

When creative destruction comes in 20 years, the pain for everybody minus the 1% will be a hundred fold bigger.

Good luck then with digging a hole.

frank further's picture

"doesn't know that the reserve currency. MUST go into debt."

Care to elaborate?  Sorry if I'm ignorant.

Creative_Destruct's picture

See post above and:

https://en.wikipedia.org/wiki/Triffin_dilemma

This is the way the world economy "works," unfortunately. Our $ are required for the international trade system to NOT seize-up; and this ENCOURAGES us to build up debt and a HUGE current accounts deficit.

 

oddjob's picture

Greg Hunter is a warrior. His latest interview with Dane Wigington is worth watching.

secretargentman's picture

He doesn't hold a candle to Jones for interruptions. 

auricle's picture

Our economy requires ever expanding debt. I don't get why Stockman thinks seriously about the debt ceiling. All it does is restrain fiscal stimulus as a form of debt creation.  Since 20T must be created over Trumps term not enough debt can be organically created (peak debt), therefore fiscal and monetary stimulus will be poured on thick as the world reserve currency goes supernova. 

Al Gophilia's picture

If you use the MSN as a benchmark, such as those wankers and wankeretts at the Cabal News Network (use Don Lemon for you gender confused choice), then Greg is comparatively  mute.

manofthenorth's picture

"By Summer, they will be out of cash"

Pssst............they have been out of cash since 1971.

Chupacabra-322's picture

@ manofthenorth,

Here's the most important part of the article:

"It is based on pure hopium and not any analysis at all...."

In other words, yes. The Market is Rigged not based on any daily Macroeconomic News. Ever.

The "Market" is based however, by the Criminal Federal Reserve's Exchange Stabilization Fund.

Rigged.

MaxThrust's picture

Using Debt to fund you liabilities means you are already out of cash

Delving Eye's picture

[Control-P], baby. Problem solved.

shovelhead's picture

Pffft.

Debt is just numbers on a register. The real problems begin when you hand over dollars and someone says "Nope. What else you got?"

Now, you have a problem.

Al Gophilia's picture

I will gladly pay you Tuesday for a hamburger today.

goober's picture

Means you are insolvent

UnclePhester's picture
UnclePhester (not verified) xythras Feb 26, 2017 4:17 PM

March 10th is the day I called for the crash to initiate...Black Friday 2017

Soul Glow's picture

While the system is going into default let's take back the real money supply.  Let's corner the silver dime market.

TAKE BACK THE MONEY SUPPLY AND BUY SILVER DIMES!

UnclePhester's picture
UnclePhester (not verified) Soul Glow Feb 26, 2017 6:40 PM

100 oz bars were 25 cents over spot today APMEX on ebay

max_leering's picture

but how many peeps have $1870 just sitting around?... most buy 5oz of singles, or 2 5oz bars

Trucker Glock's picture

Can't we do that after it drops back to $12?  Premium on junk isn't bad today, but the spot spooks me.

UnclePhester's picture
UnclePhester (not verified) Trucker Glock Feb 26, 2017 8:16 PM

I bought 20 100 oz bars in Dec of 15. I don't need any more of that big stuff.

 

 

My daily and weekly Ichimoku Cloud, and  (Aroon, Stochastic and Chaikin Oscillator) analyses all bode well for Silver to $21.50

 

 

max_leering's picture

come to the coin/bullion shop where I work and we will sell you all the dimes you'd ever want or need... quarters and halves too

crossroaddemon's picture

I still don't see what you're trying to achieve here. The only way this strategy plays out in your favor is if the present power structures lose control, and we're not going to be that lucky. We're going to be logging on here in twenty years bitching about the same shit.

krispkritter's picture

My take is it's a run at Trump/Repubs turning the tables for O'bies 10 trillion runup.  They'll try and blame this on their opposition and try to win favor in their electorate, but that is at an all time low and I'm not sure even the most ignorant voter is going to believe that it's Trump/Repubs that fried this turkey, ten years late.  There are of course a portion of the Left that will protest anything but who gives a fuck about them at this point? Fuck the Oscars and the Left/Progs. Anyone who believes that Clinton ran a surplus and balanced the budget is as midget-minded as you can expect.  #factsmatter

Miffed Microbiologist's picture

She looks like Darth Sidious. For some a burka is a good thing.

Miffed

Itgoestoeleven's picture

This is not going to be a game. Very sad times ahead.

Croesus's picture

@ Kotzbomber:

They've all been wrong in their timing...I've been hearing "The End is Nigh" for a very long time now:

What all of these prognosticators get wrong, is the fact that collapse won't happen, until "the right players" are properly positioned.

Once the "elite" are ready, they'll simply "pull it".

crossroaddemon's picture

The trouble with idiots like Stockman is they think there will ever be a day of honest accounting.

coast1's picture

you are talking about late november tho from what I remember...and altho he is a little late, the crash really did start about then, we are just experiencing the last horrah...

Yog Soggoth's picture

Stockman's predictions are in line, more or less, with the others, but there are variables that were not there under Obama. Lot's of comments about those. It might be surprising to some how much money is avaliable if the bad guys got busted, and the laws are already on the books.

I am a Man I am Forty's picture

He's been wrong about everything except the election.  

Justin Case's picture

but his timing sucks.

Who's doesn't? No body knows when TSHTF, but when it does it's too L8 to do something. Like buying insurance after you have an accident.

BeanusCountus's picture

Agree on his timing. But I don't listen to him for that anymore. Who the heck can predict when central banks are going to step in and support everything?

Bright guy though.

SillySalesmanQuestion's picture

Cougar said it best years ago.
They will print.
They will print hard and fast, they will print this mother of all bubbles until they can't, then they will print some more.

max2205's picture

David misses that Mr Yellin will print 

Billy the Poet's picture

Stockman says Yellen will tighten.

The Management's picture

Until a single bum cannot make use of a dollar...they will print.

Chief Wonder Bread's picture

<<Can someone please tell me why they wouldn't do it this time, especially when they R's control both houses AND the WH??>>

the dems will go along but, irony of ironies, the GOP, probably not.

Croesus's picture

@ Chief Wonder Bread:

I've been saying it will happen on Trump's watch since last year.

TPTB want people to swallow the Slave State Planet idea, but it will only be acceptable to the masses, if Populism is unacceptable.

Got Preps?

toady's picture

It'll just take a little more smoke-n-mirrors for the next few years because the R's are supposed to be "fiscal conservatives"(HA! there hasn't been a fiscal conservative of any prominence since Goldwater)

They'll roll out a few RINO's like McCain, Ryan & Graham saying things like "we had to for the good of the country" and "I have a plan to reduce "X", but we couldn't get it in place in time", and the good ol' chestnut, "it'll be different next time!"

truthseeker47's picture

Toady, Ron Paul was more fiscally conservative than Goldwater and he was a congressman until a couple years ago.

toady's picture

You must have missed the "of any prominence" part of the sentence. Poor ol'Ron sure talked a good fiscal conservative game. Too bad he never got anything done.

Mustafa Kemal's picture

" Can someone please tell me why they wouldn't do it this time,"

I was listening for that also, and would like an answer to that question.

The best I could get from him is Mulvaney combined with RINO fiscal conservatives will not let it happen.   But that sounded a bit weak.