Posted on 01/21/2016 8:22:39 PM PST by Pan_Yan
Video at link.
David Stockman (Office of Budget and Management, Reagan Administration) explains why the market will not be going up any time soon.
he may be right this time but he’s been calling for a major depression for 6 years..opposed to the minor one we are in now
The time is perfect going into a Presidential election. We are better off with a recession now then we were in 2008 when we had the last recession. Totally difference circumstances.
Stocks are highest they’ve been in years and silver/gold low. If the economy is so bad why isn’t it the other way around?
It’s kind of like reading Zero Hedge where they tell you all the official numbers are fake and we are on the verge of collapse. They may be right but that doesn’t help you invest.
The difference in the last six years that he (or I) did not forsee was the Federal Reserve’s involvement with propping up the federal government after China and other governments moved away from US Treasuries.
The Fed decided to channel digitized funds through the bond traders aligned with their major member banks with the instructions to purchase US Govt Securities. They started doing this in about 2010. The figured they could keep inflation in check by restricting digitized finds to the public sector away from the private sector.
Stockman (and myself) based the prospective view on Congress relying on taxpayer consent. In reality, the taxpayer is now irrelevant to government operations. The taxpayer is relegated to providing funds as transfer payments to entitlements.
The Fed propping up the federal government is a new thing in history. Stockman and many others could never see it coming because it had not previously existed. The result is an enormous debt and an enormous stock market bubble.
Because the rise in the stock market was fueled with FED paper money. Because this money didn’t circulate to the real economy it didn’t create inflation. Now the paper money is going to disappear as the market crashes. So you should be in cash and cash equivalents. You should have enough supplies to survive a couple of months without income.
We’re in a RECESSION now....heading off the cliff into a DEPRESSION !
Fracking and directional drilling have turned into a major economic disruption. Production exceeding demand has driven the price down so far that many oil producing cos and countries will not be able to service their debt. The results will be bankruptcies and further weak demand for goods and services. China’s slowing economy is a contributing factor in increased demand. Look out below.
That is exactly as OPEC wanted to happen....foreign news agencies often reported on this when they first began to juggling their oil prices and production, and their desires to crash America’s Fracking Production.
Good.
Incredibly cheap oil prices will help soften the blow. 70% of the economy is consumer driven. Walmart and Quick Trip will do OK. Maybe some bowling alleys too.
The petroleum industry has been the big water hauler for the whole economy because of the hundreds of thousands of direct and indirect jobs it had created. Just the sheer millions of tons worth of steel it requires, copper, plastic tubing, trucks, heavy equipment, diesel engines, tires, chemicals and the list goes on and on. And now a huge portion of those jobs and the billions and billions of capex dollars that goes with it. In addition, the petroleum industry is the highest taxed industry in the nation and those tax dollars are dwindling dramatically.
The FED admitted just a couple of weeks ago that they made huge mistakes underestimating the impact the petroleum industry makes to the GDP. They said they will not make that same mistake next time.
I don't know what QUICK TRIP is; sorry.
True.
“digitized funds”?
Yes, he did.
Stockman is a linear thinker, a bean counter.
“...opposed to the minor one we are in now”
We are in a full DEPRESSION in many areas and until the oil industry makes a comeback, it will continue.
I’m amazed at how a few professional economists and stock advisors understand what you just detailed with such artful simplicity.
Like the Red Chinese with their play money and rigged market, our economy has been gamed and centrally planned since 2008.
While the Chinese plan is to accelerate industrialization and create a middle, and business class, our system is now rigged to improvrish and destroy the American middle class....the last large stronghold of liberty and independence in the world.
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