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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motorollin's picture

it gets raised every time and this time will be no different

 

The republicans no longer have a need to present a united front in congress. There are factions, and the establishment pricks will not go along with team Trump. I'd imagine Paul Ryan will attempt to make a name for himself in this coming shitshow.

crossroaddemon's picture

I'm not even sure teh factions matter any more than the party names do. There are days I think each congress critter gets a little email every time a major decision is coming telling him/her which way to vote. That way you get enough of a spread tobe convincing while the deep state gets exactly what it wants.

MEFOBILLS's picture

By law, the U.S. has to pay its debts.

Much of the public debt, the U.S. owes to itself.  Ever since Wright Patman, the U.S. treasury is rebated interest on public debt held at fed. 

In a debt money system, the government's debt is the people's savings.  See Wynne Godley's sectoral balance equations.

It is pretty astonishing how many economists don't understand banking and money.  They have institutional retardation - a learned incompetence.  

The debts can be erased many ways:  Use exogenous treasury money (debt free sourced at treasury) and channel it only toward instruments held on fed balance sheet.  This then means the new U.S. notes never enter the money supply.

A trillion dollar coin can be sold by the mint to Federal reserve.  This puts a trillion dollars in the Treasuries account, which is then used to swap/cancel debt instruments.

Short term debts as they come due, can be bought with U.S. notes.  This will put money into the economy, which then will go on to pay off private debts.  Most of the short term debts have a maturity of four years, within Trumps election cycle.

Increase public debts using deficit spending and make the new debt instrument 100 years at almost zero rate. The FED will monetize this.  This new debt pays off old debts, and restructures the "pay back."  In other words, it changes the balance sheet at the fed.

Call a court and convene to erase odious debts.  For example, much of China TBill debt is odious, as the stolen industry more than pays for it.

Who had the money to loan to the U.S. to make the debts in the first place?  It originated as new hypothecations within private banking system.  The debt money system is basically fraud invented by fraudsters - and now it has metastasized.

www.sovereignmoney.eu

 

essence's picture

Meatballs    you're one of the few ZH commenters who is aware of, and posts, important facts.

Did everyone catch & grasp the significance of MoB's 3rd sentence?

-------"Ever since Wright Patman, the U.S. treasury is rebated interest on public debt held at fed."------

So many are unaware of this fact (or even who Wright Patman was).

Whatever the interest rate, if the Fed owns the bill/bond, then it remits the interest accruded to the U.S. Gov.

 

As for the rest of your comment, well, I take exception to it.

If Central Banks or Governments print up money and buy debt, then there is really nothing stopping them from "printing" money to buy anything.
Joe Citizen has to give blood, sweat & tears for "money", yet CB's (or governments) just create it out of thin air.

As we most all are aware of now, CB's and Governments don't represent or strive for the people. They represent the oligarchs.
I for one, certainly don't wish for them to have the power to conjure "money" ex nihilo, not as long as they lock people into a monetary pen by legal tender laws and taxes & regulations that penalize  alternate money systems.

 

 

MEFOBILLS's picture

 CB's (or governments) just create it out of thin air

 

This is a common sentiment, not verified by history.  For example, when the U.S. made greenbacks, they never created more than allowed by law.

When it comes to private bank credit, how is that working out for everybody?

Zimbabwe is an exception, not the rule.  All hyperinflations in the modern era were due to exchange rate pressures.

Here is a link to Canada's debt position during their sovereign money era 1938 to 1974.  Note the flat line...when their money was issued lawfully.  The inflation rate was low during this period also, they had full employment, and the commons were funded.

http://qualicuminstitute.ca/wp-content/uploads/2011/12/fedebt1.png

WallHoo's picture

I enjoy youre comments a lot!

WallHoo's picture

I enjoy youre comments a lot!

InsaneBane's picture

James Traficant's U.S. Bankruptcy Speech
The Bankruptcy of The United States

United States Congressional Record, March 17, 1993
Vol. 33, page H-1303

Speaker-Rep. James Traficant, Jr. (Ohio) addressing
The House:

"Mr. Speaker, we are here now in chapter 11. Member
s of Congress are official trustees
presiding over the greatest reorganization of any B
ankrupt entity in world history, the U.S.
Government. We are setting forth hopefully, a bluep
rint for our future. There are some who say it
is a coroner’s report that will lead to our demise.

It is an established fact that the United States Fe
deral Government has been dissolved by the
Emergency Banking Act, March 9, 1933, 48 Stat. 1, P
ublic Law 89-719; declared by President
Roosevelt, being bankrupt and insolvent. H.J.R. 192
, 73rd Congress m session June 5, 1933 -
Joint Resolution To Suspend The Gold Standard and A
brogate The Gold Clause dissolved the
Sovereign Authority of the United States and the of
ficial capacities of all United States
Governmental Offices, Officers, and Departments and
is further evidence that the United States
Federal Government exists today in name only.

Zorba's idea's picture

I'll have his people contact my people and my people will contact those people who are so dedicated and love to keep the viewing audience entertained.  hey Todd&Tapper, have we got a wopper! You wont believe this, but the Federal Government is insolvent!!! hahahahahahahahahahahahah

iwalkonwater's picture

With all the QE and the printing of cash the real price of the dollar is far less than what it was before, hence the real $20T is not really $20T but in real diluted value it could be really worth around 20-40% less comparatively. Hence the problem is not so drastic and this bafoon just doesn't get it. It reaaly aint that bad out there except for the BS press, as a good proportion of companies are doing well and achieiving goals and employing people. The only thing that could cause a downturn is the sabiotage of the economy by the FED or just bad decisions by the fed. Confidence in  Trumpism will ride out any negativity globally and I believe that we will bypass any further crashes this decade. It will be rock n roll for the next 5 years at least.

Zorba's idea's picture

aGREED! Our handler's have assured us all that they have ZERO chance of ever retiring the oceans of debt...as is the case for our own retirement intentions, the carrot is on an ever longer stick 

Warthog777's picture

Yes, the non-"debt ceiling" is raised with such regularity.  If for some reason it were to be not raised, it would signal an all out war and open rebellion against the Trump Administration and the people of this once great country.

Long pitchforks, ropes and guillotines.

Formula382's picture

Maybe because Repubs have 3 branches of government.  interesting that Aunt Janet only raised rates once in Obozo's two terms (and she could have done so 3 or 4 times in '13 alone!) but now with 1.4% GDP growth and home affordability at an ALL time low, she's going to raise them under Trump?  Yup, because she doesn't mind breaking it off in Trump as she's a Keynsian, raging liberal appointed Fed Head who would love nothing more than to let the next crisis unfold under GOP control.  This is how it works.  

VD's picture

look up Stockman's AMZN short call for end of 2016 -- the worst "trade" ever. the guy is smart, but a terrible trader. sorry.

robertsgt40's picture

Never jerk with the Ides of March. Ask Caesar. 

Truther's picture

I listened to the interview. Eye opener for sure and logical thinking.

Chief Wonder Bread's picture

As always, Stockman is a great interview

"Whether he realizes it or not, Trump is destined to preside over the Great Disruption... which is why I voted for him because we need that... He will be the Great Disrupter... we need this disruption so we can start over from this mess..." (paraphrasing)

Giant Meteor's picture

Have not listened to the interview yet, but my reason for voting for Trump, is the same as described. I figured better for him to be a wrench in the gears at this point ...

SafelyGraze's picture

guess what.

new holiday.

holiday extended.

holiday not needed.

it was never needed in the first place.

debt puts money into circulation.

that's why we need more of it.

not holidays.

just debt.

hugs,
the international society of debtors 

Wulfkind's picture

"Beware the Ides of March"

Actually....no....nothing is going to happen.  Lord High Maximus Orange Julius ( May His Name Be Praised Forever ) will ABSOLUTELY NOT let a debt ceiling crisis get in the way of MAGA.

He's the KING OF DEBT......he said so himself.

It's debt to the MOON baby.   Papa needs a brand new WALL.......LOL !!!!!!!!!!

UnclePhester's picture
UnclePhester (not verified) Wulfkind Feb 26, 2017 5:22 PM

If your goal is to come off as a pathetic, desperate, delusional, butt-hurt name caller, you have succeeded beyond your wildest dreams.

 

 

You need a case of Butt-Hurt Salve...Dr DJ Trump's works well I hear....

 

APPLY LIBERALY FOR THE NEXT 8 YEARS!!!!

 

http://clashdaily.com/2016/12/viral-dr-trumps-butt-hurt-salve-melting-in...

 

Wulfkind's picture

No tax cuts this year.

No immigration reform this year

No Wall this year

No repeal or replace of Obamacare this year

And just revealed on this very site......Treasury Secretary Mnuchin ( Goldman Sachs ) reiterated that Drumpf       WILL NOT TOUCH ENTITLEMENTS.

So.....there goes MAGA

 

I actually have some extra strenght Preperation Butt Hurt in my bag......I'll Fed Ex it to you overnight priority so you can begin to apply first thing in the morning.

general ambivalent's picture

Kek does not have a spray-tan dick. Stop licking it.

Chief Wonder Bread's picture

@ Wulfkind,

did you listen to the interview? You should listen to the interview before gibbering that kind of flamboyant nonsense

Wulfkind's picture

Hey Snowflake.....

100 % fact....

There will be NO tax cut this year

There will ne NO wall built this year

There will be NO repeal and replace of Obomacare this year

There will be NO immigration reform this year.

There will be NO entitlement reform this year......or ANY year

There will be NO debt reduction this year.

There will be NO government shut down this year.

There will be NO debt ceiling crisis this year

 

So....that leaves just 2018 to get ALL of this done because then the Congressional elections come up.  And you know HOW that goes.

That leaves 2019 to pick up the pieces....because 2020.  And you know how THAT REALLY goes.

 

Drumpf......one and done.    LOL !!!

CJgipper's picture

Deportation is HAPPENING.  Immigration reform - done.

Chief Wonder Bread's picture

Beginning on an idiotic proposition is no way to persuade others.

Others might be more willing to consider your predictions if you hadn't characterized them first as facts.

shovelhead's picture

Emergency! We have an angry one....

Comfort puppy needed STAT.

Zorba's idea's picture

Actually, the Donald is here to negotiate terms and conditions for the impending debt bomb that the elites would like to pin on his shift, and shove up the flyovers asses for getting out of line this past Nov8. I'm hoping when the shit house goes up we'll actually have a POTUS that will consider how best to mitigate the losses on main street. I'm sure wall street has all the hedges in place to mitigate their liabilities. 

p.s. ( wall = $15,000,000 before offsets/ National Debt = $20,000,000,000,000 without normalized carying cost, OOoops)

crossroaddemon's picture

Really? Trump was born with a silver spoon up his ass and doesn't even know what main street looks like. He'll protect his own first.

Lynx Dogood's picture

As Europe falls apart, they wwill send there money into the US markets. What Trump does at this time is not even relevent. The rich in europe will keep their money, and the US markets will go boom. History is so great.

 

Inflating one market or another.

VWAndy's picture

  They will crash this pig whenever they feel like it. If they want to crash it on monday? Guess what.

Sonny Brakes's picture

Let me guess, gold and silver?

Sonny Brakes's picture

What makes me wonder is how excited gold bugs get when the value of their gold goes up relative to fiat currency, while the cost of everything else they have to buy with their fiat currency also goes up as if they live in a vacuum.

Scuba Steve's picture

So you think your stocks are going up by organic profits? haha ... stupid sheep.

Yog Soggoth's picture

Really? So you are denying that if you parked your money in PM without a care in the world 25 years ago that you would not only be ultimatlely ahead of the game without taking risks to gain more money$,but you could have made a modest to strong gain against artificial inflation given the strategy you personally accepted. The charts from the past say otherwise, but please enlighten us all with yours. You got no charts ... just stupid words.

Robert Trip's picture

Charts are for suckers.

Charts only indicate what has already happened.

And those that predict the future are on par with tea leaf reading.

Old news is no news.

Sonny Brakes's picture

I spent my life living, not investing. It's all going to land up in the hands of the last man standing. Remember, you are dealing with banks and the state and they're just not going to be cooperative when it all falls apart.

Croesus's picture

@ Sonny Brakes:

It depends on why you bought in the first place.

Most of the "Johnny-come-lately's" bought out of greed and many of them got hosed, because they were buying from carnival barkers, and had little-no understanding of things.

I bought as insurance, and bought most of my position between $260-350/oz.

When you understand that "TPTB" play a long game, and that patience is rewarded, the 'background noise' is meaningless.

When you observe that the problems in the economic machine have stayed the same, or gotten worse, it doesn't matter if talking heads think "gold's going to tank".

When they called it a 'barbaric relic', they forgot to mention that central banks spend millions hoarding it, building elaborate security systems to protect it, and employ thousands of people to guard it.

So, to answer your question:

I don't get excited; I got less worries, that's all, and though intangible, you can't really put a price on peace of mind.

Sonny Brakes's picture

I'll gladly take one to the back of the head before I have to start taking the lives of others to defend the unjustifiable economic Ponzi scheme that has been an ongoing nightmare.

aloha_snakbar's picture

I have $5.00 I could lend them...

booboo's picture

Shit son, lend it! they already stole from your unborn grandson.

debtor of last resort's picture

It will tank in the streets.