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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hedgesofnight's picture

Copied from page two of the comments here. These charts are good.

Seriously?   Again?  More speculation from unreliable sources.

 

The thing is that there are some analysts who atually make predictions and the predictions come true. Some analysts who give real time buy and sell signals and they work out and MAKE MONEY. Now why in the world everybody is so fascinated with these morons who never call anything correct is beyond me.

 

ShepWave the ex-Goldman Sachs guys have been nailing markets. END OF STORY!.

PROOF:https://t.co/f3mU9N8rc4          

KanSass's picture

shep  wave is the only analyst who called the Tump winm the trump rally and to NOT sell the inauguration. The amount of guess work by most analysts just over the past six months is enough to make me sick to me stomach.  Thankfully shep waves have been calling the moves. 

 

Good charts. 

Kefeer's picture

You have no respect for ZeroHedge; why would anyone care what you have?  A: WE DON'T! 

 

Troll somewhere else; like a homeless shelter.

xantippa's picture

But they are right. SHEPWAVE is probably the only analysis group left who is consistently correct year over year. All former Goldman people though. 

 

Anyone who is a real trader or investor knows them already. Zerohedge is all ads and not right place to speak of actual analysts.

Lazane's picture

Perhaps a scenario could be arranged that puts the Fed in a very dim light with American voters. A light so dim that it would force the Chief Exec to cancel the Feds ticket, shepherding in the the era of No Fed. Laying in he groundwork to show the incompetence of the Fed and how absolutely corrupt that they have been for America would be a tall order even though the Fed and corrupt politicians have been primarily responsible for America losing its financial and economic standing in the world, or greatness if you will. Proclaim that the Fed should be abolished, that they have foisted a phony financial scheme upon the American people by lending to the American people this 20 trillion at interest, resulting in them becoming the largest debtor nation of people on planet earth.  Then the Chief Exec can order the Treasury department to print 40 Trillion First American dollars at no interest. Pay off the 20 Trillion owed to whomever is holding the 20 trillion in debt. America really needs to be Great Again, though this time we do it with our own money, 20 trillion at zero interest. Once this is accomplished the Chief Exec can then provide notice to the world that America is now open for business. It would be a refinance Bonanza of epic proportion that could save an American republic from the ash can of history. Boy this guy is really ranting tonight.

NDXTrader's picture

Japan and Europe will die first. Japan has been in its debt death throws for 20+ years. No matter how screwed the US in the long term, it is still the cleanest shirt, and will have the advantage of the reserve currency for the forseeable future. That collapse is way down the road

Kefeer's picture

Anyone care to bet he is right?  Meaning I believe he is wrong?

Davidduke2000's picture

If I remember correctly , 4 weeks ago the republicans said the deficit will reach $30 trillion in the next 5 years under their watch, so they are prepared to raise the limit.

But I wish Trump will take the ax and start chopping the waste in all departments especially defense .

marx's picture

There will be no meltdown

1) just like 08 crisis, gov't will impose a stealth tax in the way of low savings rates

2) gov't will by stealth inflate their way out of debt.  

and there many more tricks the gov't could use that are too complicated for me to articulate

 

Ben A Drill's picture

I remember y2k was going to be a big problem, or was it?

How many years ago was it that the s&p 500 hit 666? Even a 1000 point drop in the DJIA would be plenty of time to sell.

The most important thing to do is stay out of debt. That means no car loans, pay off your credit cards every month. Live within your means or better yet, live below your means. Don't loan money to your relatives, not even to your brother or sister.

Keep Stacking. No one is more important than me, myself and I.

When your out of debt, you are the king of your castle.

directaction's picture

What you said, it's like I said it.
Weird.
I've been living and thinking and acting and talking that philosophy for over ten years, back starting when I wised up. 

Mark of Zerro's picture

Sorry D.S. I've been reading your work for years.  It's B.S.

It's almost like you are an old fart who's pissed off that the world has passed you by.  

Hang it up.  Your market timing is atrocious.  

Sorry.  Just sayin'........

10mm's picture

Everybody go back to sleep. It's all you got. Rest dammit. 

TheWrench's picture

Well, Dave would be right if 1+1=2. But in Fed World 1+1= a trillion. So March 15 won't be any different from March 14. It will only change when the mushroom clouds rise.

directaction's picture

My deepest hope, my craving desire, which would send me into overjoy,
is that the market crashes in a wildly spectacular manner,
forcing the price of gold to drop by hundreds of dollars so I can buy more of that awesome AU!  

Wilcox1's picture

So Is Dave back with us?

apoplectic query's picture

I don't get it. What's the $20 trillion debt consist of? Treasuries? Why can't the treasury mint billion dollar coins as-needed to pay the interest on the debt and buy them back as they mature? That wouldn't be inflationary, would it? It's not like all that cash is going to end up in the real economy anyway.

sinbad2's picture

Some of it is treasuries, but a lot is spent on manipulating prices.

When they buy gold futures at $1400 an oz, and then sell them at $1200 an oz, to force the price down somebody has to pay the $200, and that somebody is American taxpayers.

It's unlikely that they would make the numbers public, but if the stock market crashed, the $20 trillion Government debt would double overnight.

Obama left a time bomb for Trump, and it will blow, the only uncertainty, is when it blows.

Itshappening's picture

beware the ides of march

Fundies's picture

Ohhhhhh......what a feeeeling......we're dancing on the ceiling !!!!!!!!!!!!!!

honest injun's picture

The markets are rigged.  Obama used the excuse that Bush left him a disaster to explain his failures.  Trump will not be able to do this as easily because the markets have gone up 10% since he was elected.  The markets is seen as a proxy for how the economy is doing.  The media will remind everyone that Trump was credited for the rise so he will be blamed for the fall.  Will this happen on March 15 or September 15, I don't know.  But, the USS Titanic has hit the iceberg.  Many people see it and don't want to get in a lifeboat yet because it is more comfortable on the ship.  They are watching for the first sign of panic to get in a lifeboat.  For many, it will be too late. 

One of We's picture

Time for GS to take a haircut. Debt jubileeeeee!

Father ¢hristmas's picture

Trump needs to triple the debt.  Why the motherfuck not?

Establishment conservatives are some fuckboys.  Nobody give a rat's ass about a debt clock.

We got the Chinese by the balls.  The only reason the Chinese gubmint stays in power is that American goyim plebes can purchase their shit.

If Whiteboy Roy in Congress can't issue moar debt so Billy Bob and Tyrone can buy moar Chinese goods, then Xian and Ling Ling will show up in Beijing with pitchforks and torches.

Come the fuck on.  You really think:

A) Cracker gubmints/Chink gubmints are gonna risk civil war over debt in 2017?

or

B) Crackers and Chinks are gonna go to war over this bullshit debt in 2017?

"Nobody's gonna pay for it anyway!" - Henry Hill, GoodFellas

Trump and the Repubs need to triple the goddamned motherfucking debt.  Grandiose infrastructure projects, high speed rail that goes right into a fucking brick wall, fiber-optic cables so that Jamarquavious can surf PornHub for a $1 while waiting for his EBT to load up for the month.

Boost military spending to the point that, not only are military families taken care of for life, but the widow gets a complimentary ICBM and an Abrams tank if their spouse dies on the job.  Feed soldiers filet mignon and fill their canteens with Dom fucking Perignon.

Free college for the lil peckerwood green-haired snowflakes.  Fuck 0bamacare, give the goyim free healthcare!

Why the motherfuck not?  Nobody's gonna pay for it anyway!

Americans have to live well so that mainland Chinese have a pipe dream to aspire to.  That's the only thing that keeps them from leaping out of the windows to their deaths at the Apple factory.

Well, that and the safety nets.  *chuckle*

Steal Bernie Sanders's entire stupid ass platform.  Reelection guaranteed.  And why not?

Nobody's gonna pay for it anyway!

The same goofy assholes who are worried about $20 trillion in debt, were keeping their fingers crossed hoping for handjobs in college after their Young Republicans Club meetings, worried about $1 trillion in debt.  Ignore those goy shitheads.

Debt?  What the fuck is debt?

Nobody's gonna pay for it anyway!

Ace006's picture

I detect a certain cynicism in your comment.

GoldHermit's picture

I agree! Better be stackin'

RevIdahoSpud3's picture

As long as the military is strong enough to force other countries to trade/use/accept the dollar it will still funtion as something similar to money even if it has no value as it has been doing for decades. The usefulness is more in a score card capacity representing a claim for goods or labor. At the same time gold, silver or diamonds, whatever the tangible medium functions no differently. Gold, silver etc. has value because everyone agrees that they have value to a point. In the case of famine or mass starvation a dozen bisquits could have more value than pounds of gold or silver. In a way, it's a matter of timing. The military is a perfect example. They will fight and kill as long as they are fed. The collapse of March 15 is just a point in time when theorhetically the dollar collapses and other countries stop buying our debt? So where does that leave them? If they abandon the dollar they still have to trade in something. If they have oil but no wheat or sugar but no iron how do they transact? What scoring system would they use to determine how much sugar should be bartered for an equivalent value of oil? If the dollar collapses then virtually all society's world wide collapse as well. At that point neighboring country's invade each other for whatever spoils they can find as well as roving hoards invading cities, neighborhoods or homes locally. Some prepper's have been storing up for such an event for decades. The Mormon church has taught as part of its doctrine the practice of storing for a melt down since its inception. Mankind's journey through history has seen a continuous fall of old empires and the raising of new. The transition from one to another, from conqueror to conquered is the messy part. What is the solution? According to the author we only have two weeks! If you aren't ready now you won't be ready then. The powers have had centuries to practice herding and manipulating the sheep for their benefit. Unless they plan on flaming all but 500,000,000 world wide March 16 will be no different than March 14.

just the tip's picture

just to be pedantic and OT, why would stockman refer to the actions of the HNIC and boner as being right before the last election in october 2015?  granted it was before the last election, but a full year.  why would he say "right"?

rahrog's picture

America has devolved into a Rule by Law society (the opposite of Rule of Law).

 

There is NO debt ceiling. The scum who run DC & NYC will simply change the law and keep on creating those debt certificates.

 

 

bankerssuck's picture

Blah, blah, blah

the us central bank needs to constantly print money for the fraudulant plantation dollar to exist....

there will be no crisis in raising the "limit", just in the political.whores engaged in their pathetic illegal activities.

after the 'activities' are climaxed, and the legal us taxpaying citizens bent over and sore, the money will appear from the various blackhawks for distribution to receipients we cannot pronounce their names.....

Zimbabwe utopia oh you look so fine now....... with your stacks of currency toilet paper....... and your useful idiot politicians oh so corrupt.

america not too far now..... but they are working on it ..... it will pass just like a kidney stone, and then utopia.

We can finally move onto the next phase of the rape, called "SDR's" and "cashless society".... ya know to keep the "terrorists" from obtaining money....... hahahahahahahahahahahaha

Die banksters and whores in govt

cageysea's picture

"... “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..."

 

And what of it? It expires, they extend the 'holiday.' When have they ever failed to do this? When have they ever failed to kick the can down the road? 

 

Look, much smarter people than I say this is a very, very bad idea, and I agree with them, but there never seem to be any consequences. I mean, I know what would happen to me if I had decided to declare myself a 'holday' from my debt. But then I don't have a printing press in my basement to grind out more money. 

 

I always hear about this 'inevitable' collapse, and I agree that by all standards of sanity, there should be one. But there never seems to be one.

bankerssuck's picture

Collapse has been occuring...... maybe you just haven't noticed.

But, when you get your paycheck, 

and it is less than your cost of living,

you might be enlightened to the slow motion collapse.

Of course, the central banksters want to avoid this circumstance for the majority of the legal us taxpayers,

otherwise their usary income will blow up in their faces, and the much awaited collapse of the plantation dollar will have occured.

 

 

Manipuflation's picture

I have moar silver on the way.  I should and will buy MOAR. 

I don't say much about markets to often.

The funny thing is that none of what I do for investing wise is for me.  I dont care.  I like Smaug's statement because it is true.

The dragon curse.  The sickness.  Interesting.  

I want to live a simple life.  I have no lust for power and wealth.  That does not mean that I am stupid.  Keep stacking. 

 

  https://www.youtube.com/watch?v=2SWMmxGiwgQ

Treetop's picture

Strongly disagree...most probably things will get rolled forward by a Republican House and Senate. No one is going to not raise the cieling again. Trump will succeed in building a more efficient bureocracy--smaller and more agile....but no less able to pump money into the system that is debt fueled. This can go on longer than most think possible...for a good example, just look at Japan...should have collapsed decades ago...Federal reserve hasnt begun to buy stocks yet....long way to go before anything really bad happens 

Treetop's picture

Strongly disagree...most probably things will get rolled forward by a Republican House and Senate. No one is going to not raise the cieling again. Trump will succeed in building a more efficient bureocracy--smaller and more agile....but no less able to pump money into the system that is debt fueled. This can go on longer than most think possible...for a good example, just look at Japan...should have collapsed decades ago...Federal reserve hasnt begun to buy stocks yet....long way to go before anything really bad happens 

Wahooo's picture

You're right about increasing the debt ceiling, but Drumpf is going to spend money like a bi-polar drunken sailor. What comes after trillion?

Hillarys Server's picture

It's impossible to overestimate the hatred of some people towards Trump.

He's worse than Hitler, worse than Satan to them.

At the very mention of Trump's name, their face, heartbeat, blood sugar, cortisol and adrenaline levels go into instant panic mode. They can't even speak, they just stand there frozen.

They'd destroy the US economy just to spite him.

They'd go to CERN and create a bubble of false vacuum that expands at the speed of light and destroys the entire space time continuum if it would ruffle a few strains of his orange hair.

So yes, some form or other of big fuss will occur on March 15. Anything to get back at him.

Totally_Disillusioned's picture

Not sure about that but I do believe Obummer's scorched earth efforts of the last year or so of his term.  The markets/Fed/economy have been manipulated to fall on Trump's watch making way for yet one more Hillary run.

Crusader75's picture

Mmm, Stockman's always interesting, and correct about the problems/imbalances, and when they started (under the Reagan administration). But what he thinks "should" happen isn't necessarily what "will". Morality and investment don't mix. If you'd followed his advice since 2009 you'd have missed an enormous opportunity.

alfbell's picture

This guy is clueless. He's been crying the sky is going to fall for a decade. Surprisingly enough, he doesn't even understand the basics of economics and how the government and economy actually work. So he was in the Budget Office for awhlle. Doesn't mean he understands how things acutally work or has a grip on basic principles. No one in Congress or most all other government agencies understand it either. Whether right or wrong, probably only a few people in the US Treasury Dept and in the Fed Reserve actually understand how the system works.

The US is a sovereign country that can print its own currency and only has debt denominated in USD. Plus, the currency is the world reserve currency. It is still needed for the purchase of much of the oil on the planet and is needed for international trade. And the USD/Treasuries have been the safe haven for everyone, and will continue to be so for a very long time. It can print as much money as it wants. It CAN'T go broke, it CAN'T default on its debt. As long as there are products and services in decent ratio to the currency floating around in the economy the USD will hold its value. There is no currency that can compete with it. 

Nunyadambizness's picture

I agree with you to a point; however, I disagree entirely with the sentiment "It CAN'T go broke, it CAN'T default..."  It CAN, and it WILL--if changes are not made immediately.  Let me point to multiple agreements with China and Russia among other countries that are working AROUND the dollar so that "petrodollars" are no longer needed to buy oil.  Or, other agreements between countries that excclude the dollar.  Things are in the works to change the "world reserve currency", and it's going to happen in the near future.  The US has been throwing its weight around since WWII, and movement is being made to push back against us, just like prior world reserve currencies in history--most recently the British Pound Sterling.  At some point other countries realize that the US can never pay back its debt, and the dollar drops to roughly the value of a peso--or, worse case scenario, a Zimbabwe billion-dollar note.  Not worth the paper it's printed on.

hazardous77's picture

Government accounting doesn't take into effect the ASSETS of the nation. The Federal government owns trillions of dollars worth of unimproved and improved land. The Federal government owns trillions of dollars of unmined gold, silver, palladium and other minerals. 

 

The several State governments likewise own or control trillions of dollars of unimproved and improved real estate, as well as unmined mineral deposits.

 

The Asset Value of the USA far exceeds the combined debt of the States and the Federal government. Put into proper perspective, the current outstanding debt is a drop in the proverbial bucket, although I personally wouldn't want to have to pay it off!

Iconoclast's picture

Nonsense, we've had many of these chicken licken debt ceiling dates with destiny and Armageddon, each one is 'solved' with MOAR debt. That's the blueprint until suddenly printy printy doesn't work anymore. Once that happens we move to cashless as there's no salvation left, no more solutions, we'll be all out of stupid but it won't be in 3 weeks time, think 30 years.

NuYawkFrankie's picture

Stockman - seeing the world thru the prism of a spread-sheet - doesn't appear to realise that for the USSA it's already O-V-E-R... materially, morally and metaphysically.

the not so mighty maximiza's picture

stockman was praising obama in 2015...he is sorta scary in thought process

Totally_Disillusioned's picture

and crickets on Obummer's failed economic policies...

Vinividivinci's picture

...or...never let a good debt ceiling crisis go to waste...
beware the ides of March, bitchez.