David Stockman says get to cash
derryb
Posts: 36,823 ✭✭✭✭✭
Former Regan budget director (who resigned in protest over monetary policy) delares "Sundown in America."
"There was never a remote threat of a Great Depression 2.0 or of a financial nuclear winter, contrary to the dire warnings of Ben S. Bernanke, the Fed chairman since 2006. The Great Fear — manifested by the stock market plunge when the House voted down the TARP bailout before caving and passing it — was purely another Wall Street concoction. Had President Bush and his Goldman Sachs adviser (a k a Treasury Secretary) Henry M. Paulson Jr. stood firm, the crisis would have burned out on its own and meted out to speculators the losses they so richly deserved. The Main Street banking system was never in serious jeopardy, ATMs were not going dark and the money market industry was not imploding."
". . . what’s at hand is a Great Deformation, arising from a rogue central bank that has abetted the Wall Street casino, crucified savers on a cross of zero interest rates and fueled a global commodity bubble that erodes Main Street living standards through rising food and energy prices — a form of inflation that the Fed fecklessly disregards in calculating inflation."
"The United States is broke — fiscally, morally, intellectually — and the Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German-dominated euro zone is crumbling) that will soon overwhelm it. When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is. "
"There was never a remote threat of a Great Depression 2.0 or of a financial nuclear winter, contrary to the dire warnings of Ben S. Bernanke, the Fed chairman since 2006. The Great Fear — manifested by the stock market plunge when the House voted down the TARP bailout before caving and passing it — was purely another Wall Street concoction. Had President Bush and his Goldman Sachs adviser (a k a Treasury Secretary) Henry M. Paulson Jr. stood firm, the crisis would have burned out on its own and meted out to speculators the losses they so richly deserved. The Main Street banking system was never in serious jeopardy, ATMs were not going dark and the money market industry was not imploding."
". . . what’s at hand is a Great Deformation, arising from a rogue central bank that has abetted the Wall Street casino, crucified savers on a cross of zero interest rates and fueled a global commodity bubble that erodes Main Street living standards through rising food and energy prices — a form of inflation that the Fed fecklessly disregards in calculating inflation."
"The United States is broke — fiscally, morally, intellectually — and the Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German-dominated euro zone is crumbling) that will soon overwhelm it. When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is. "
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
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Comments
Thanks.
The points he makes are dead-on, in my opinion. I am somewhat surprised that he didn't mention precious metals, but maybe he's just not wired that way. Good article.
I knew it would happen.
I knew it would happen.
World Reserve Currency, But No Thanks: Australia And China To Enable Direct Currency Convertibility
It's happening faster than I thought.
In God We Trust.... all others pay in Gold and Silver!
<< <i>Just asking...derryB, so, have you liquidated all PMs and gone to total cash!
Thanks. >>
David Stockman, not derryb, says go to cash. Its everything else he says that makes the link worth reading. There is a time for cash and it may very well be approaching.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>He might be pimping his book, but how does that invalidate what he says in that book?
I've read many doom n gloom books over the years. The dire predictions never seem to come to pass.
The only people (aside from the banksters) that seem to be profiting from our broken down economy are book authors and newsletter writers.
<< <i>The only people (aside from the banksters) that seem to be profiting from our broken down economy are book authors and newsletter writers. >>
and many of those that have taken their advice.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
And on this April Fool's this Administration is calling April Financial Literacy Month...to teach young people how to budget. Not a joke. I wish it was.
And this financial advice comes from someone who filed for bankrupcy? You can't make this stuff up!
Liberty: Parent of Science & Industry
<< <i>He might be pimping his book, but how does that invalidate what he says in that book?
What he says are opinions, some based on fact and others based on emotion. Comments like this, "The United States is broke — fiscally, morally, intellectually", cause me to consider the real motive of his writing. To me he sounds to be fear mongering at the very same time he belittles the very same--"was purely another Wall Street concoction.
Honestly, I think hes just upset hes lost 30% of "money" in his silver position.
Knowledge is the enemy of fear
Honestly, I think hes just upset hes lost 30% of "money" in his silver position.
I would be a little upset also. Stockton was on Squawk Box this am.
He must have had a tough time on CNBC , everyone on there sold their soul a long time ago. You can still find idiots on there at least once a day suggesting you go long apple.
Go watch bloomberg at least the eye candy is better
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i> Comments like this, "The United States is broke — fiscally, morally, intellectually", cause me to consider the real motive of his writing. >>
Surely, not everyone and everything that makes up the USA is those things? Certainly not anyone who posts on or reads these boards is broke. In fact, I don't personally know anyone who is fiscally, morally, or intellectually broke.. do you? Maybe you do (I've absolutely heard such people exist) but they're the exception.
If broke people are commonplace in a person's environment, I suggest they move someplace where the population is of a higher calibre
Liberty: Parent of Science & Industry
<< <i>
<< <i> Comments like this, "The United States is broke — fiscally, morally, intellectually", cause me to consider the real motive of his writing. >>
Surely, not everyone and everything that makes up the USA is those things? Certainly not anyone who posts on or reads these boards is broke. In fact, I don't personally know anyone who is fiscally, morally, or intellectually broke.. do you? Maybe you do (I've absolutely heard such people exist) but they're the exception.
If broke people are commonplace in a person's environment, I suggest they move someplace where the population is of a higher calibre >>
I believe he is referring to our government and our national leadership and I would agree with him
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Too many people have no concept of how to produce value.
The financial service sector of our economy has grown too large and I wouldn't
be suprised to see a significant reversal of fortune in the next 36 months.
Then you have to print it. - derry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>This country needs a new direction. People have forgotten how to use their back muscles.
Too many people have no concept of how to produce value.
The financial service sector of our economy has grown too large and I wouldn't
be suprised to see a significant reversal of fortune in the next 36 months. >>
I agree with this .
90% of what that sector does is best classified as theft.
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Stockman is at odds with Sinclair who said the financial system would have completely seized up if the big banks weren't bailed out in late 2008. While things would have eventually righted themselves, it would have been a terrible several weeks to months as 100% gridlock would have resulted. Imagine no commerce, no money, no banks. >>
Scary, but I'm in agreement with JS. Stockman forgot what happened in 1929 when the Fed's decided not to intervene and let the market take their course.
<< <i>If you want to know the truth about something I have learned a former insider is the best source. Stockman knows better than most how the national financial machine is affected by politics/bankers. If he says trouble lies ahead I for one will heed his warning. >>
I agree.
So, are you going to all cash as he states in his conclusion at the end?
Looking for opinions here. Dump PMs now ASAP?
Thanks.
No way am I dumping physical Pm's. Physical is the same as cash or better. Dump the fairy tale silver and gold.
Stockman doesn't discuss metals often. When he says trouble dead ahead, move to cash I believe he is referring to a brewing storm with equities and bonds. I consider metals to be a place to park my cash.
He did go on record in 2012 when asked where to invest: "My investing model is ABCD: Anything Bernanke Cannot Destroy: flashlight batteries, canned beans, bottled water, gold, a cabin in the mountains."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>He might be pimping his book, but how does that invalidate what he says in that book?
I would have to say...partially yes. These type of "coming crash books" are similar to "Dow 100,000 books", For one, he thinks he can time the market(his timing appears lousy on top of it) and two, cash is a good investment for all of your money right now. Two points of view that are the arena of the self deluded. Of course he probably thinks he's not timing the market by telling people to go 100% in cash
He with knowledge does not predict.
He who predicts, has no knowledge.
Just watch the 10 day weather prediction for verification.
axiom 6b
he who disregards knowledgeable warning usually gets burned.
From his book: "The breakdown of sound money has now finally generated a cruel endgame. The fiscal and central banking branches of the state have endlessly bludgeoned the free market, eviscerating its capacity to generate wealth and growth. This growing economic failure, in turn, generates political demands for state action to stimulate recovery and jobs. . . At the end of the day, the state labors mightily, yet only produces recovery for the 1 percent."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
further down the road.
I do not sense the political will either from the pols or USA
citizens to deal with the inevitible pain of a major reset.
It's coming and about the only thing one can do is diversify, diversify, diversify.
And have cheap energy
"To deal with the crisis that’s already here, we need monetary and fiscal stimulus, to induce those who aren’t too deeply indebted to spend more while the debtors are cutting back."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Keynesian Paul Krugman responds
"To deal with the crisis that’s already here, we need monetary and fiscal stimulus, to induce those who aren’t too deeply indebted to spend more while the debtors are cutting back." >>
Fiscal stimulus?
What's that? Krugman advocates fiscal stimulus with his right hand
and his left hand says tax more "to ease the pain" or maybe
"for the children"....or was it terrorism protection
I forgot.
In this country we have never pulled out of a recession
by taxing more...
We pull out by a) taxing less b) extendind credit & c)
C) creating an environment where you take risk and get rewarded.
Zero interest rates are counterproductive. Why would a bank loan with rates
this low. Answer..they won't
The gubbermint is sucking up all the excess capital for entitlements.
<< <i>Seems like the accepted solution is to keep pushing the problems
further down the road.
I do not sense the political will either from the pols or USA
citizens to deal with the inevitible pain of a major reset.
It's coming and about the only thing one can do is diversify, diversify, diversify.
And have cheap energy
I agree. As for pushing the problem further down the road, I look at it as they NO LONGER have a choice. They have run out of options, and we are now in the portion of the game where they will keep it afloat as long as they can, to allow the connected ones save what they can for themselves. I just don't see any solution to the situation, or any way to get rid of the debt.
Where does that leave us? Wish I knew...
Cash in savings accounts? Right.... I have no doubt that when it comes time for the connected ones to save themselves, they will latch onto 401K and savings accounts RE Cyprus.
Stocks? Right... a market being pumped up by QE; run by computer algorithms to steal your money; can crash whenever.... either by intention or not.
Precious metals? Right.... definitely manipulated by the shorts; confiscation remote but always a possibility; can be taxed/registration required to make transactions very difficult; many fakes making their appreance....
Cash under the mattress? Right... If found somehow by law enforcement, will be confiscated; can be demonitized; loss to theft; etc.
Real Estate? Right.... You don't really OWN any land; can be taken from you by whim by government; can be taxed excessively; cannot be taken with you to another location...
I feel pretty much under assault; no truly safe place to be when it comes to money. Best one can hope for is diversification, so that if one area gets hit, hopefully some other areas will be still intact... at least for awhile. So... all my money going to beenie babies and bitcoins.... ummm, wait.... perhaps I need to think this through a little more...
<< <i> So... all my money going to beenie babies and bitcoins.... ummm, wait.... perhaps I need to think this through a little more... >>
Ahhhh.... I have a few that I can let go for some Silver
lol,
Ray
Holy crap. When's it gonna stop?
I knew it would happen.
<< <i> Sinclair is now saying that "Withdrawals of more than $2500 cash now produce suspicious transactions reports to the Fed. >>
While the FED may have regulatory/enforcement power over banks, they have none over you and I. If reports are going to the FED they are informational only.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I believe stockman is going to be on bloomberg tv this morning around 11 eastern time
<< <i>This cash we're supposed to get to, is this the same cash dollars that's supposed to be doomed in it's death throes?
And this financial advice comes from someone who filed for bankruptcy? You can't make this stuff up! >>
Big difference between cash and digi-dollars that exist on balance sheets in cyberspace. Cash (FRNs) is relatively rare. Cyber dollars are a dime a dozen.
US citizens might have $400 BILL in cash readily available to them. Ironically, it's about the same amount as stated US gold reserves. What Stockman is saying
is don't count on your digi-dollar wealth to bail you out. I would consider precious metals, gem stones, many rare coins and collectibles, and key consumer items to be
the rough equivalent of cash should digi-dollars go "proof" or experience a 2-3 week long banking holiday.
<< <i>This cash we're supposed to get to, is this the same cash dollars that's supposed to be doomed in it's death throes?
And this financial advice comes from someone who filed for bankrupcy? You can't make this stuff up! >>
David Stockman has not filed for bankruptcy. An auto parts making company of which he was CEO filed for bankruptcy in 2005.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
One of the commenters on ZeroHedge made the remark that Stockman had to file for bankruptcy, and since it is on the Internet, it must be true.
I knew it would happen.
<< <i>
<< <i>This cash we're supposed to get to, is this the same cash dollars that's supposed to be doomed in it's death throes?
And this financial advice comes from someone who filed for bankrupcy? You can't make this stuff up! >>
David Stockman has not filed for bankruptcy. An auto parts making company of which he was CEO filed for bankruptcy in 2005. >>
So he knows how to manage a company? Or does he really know how to use the legal system?
He's beginning to sound more and more like a hypster, shyster.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>This cash we're supposed to get to, is this the same cash dollars that's supposed to be doomed in it's death throes?
And this financial advice comes from someone who filed for bankrupcy? You can't make this stuff up! >>
David Stockman has not filed for bankruptcy. An auto parts making company of which he was CEO filed for bankruptcy in 2005. >>
So he knows how to manage a company? Or does he really know how to use the legal system?
He's beginning to sound more and more like a hypster, shyster. >>
Of course he is, you don't agree with him. Respect for differing opinions will come with time.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i> So he knows how to manage a company? Or does he really know how to use the legal system?
He's beginning to sound more and more like a hypster, shyster. >>
We all naturally assumed that the CEO's of AIG, GE, GM, GS, JPM, Citi, MS, BoA, Lehman, BSC, Merrill Lynch, etc. all knew what they were doing from 2004-2008.
Obviously they didn't. And all of them apparently were experts at using the legal system. Most of them didn't go bankrupt and not a single banker has been jailed/fined for
the financial crimes committed during that period. Note that over 1,000 bankers/financial types went to jail during the 1980's S&L crisis. Over 10,000 were prosecuted.
Anyone see a trend here?
Did Stockman's company need a govt bailout to keep operating or did they just let the market follow through?
Here's an old article about derivatives there were plenty of warnings even 20 years ago
looters