David Stockman: "The Capital Markets Are Simply A Branch Casino Of The Central Bank" - Must Read

ZeroHedge ^ | 7/24/2012 | David Stockman and Alex Daley

[mojito]

David Stockman:....I don't think we are at the beginning of the recovery. I think we are at the end of a disastrous debt supercycle that has gone on for the last thirty or forty years, really. It started when Nixon defaulted on our obligations under Bretton Woods and closed the gold window. Incrementally, year after year since then, we have been going in a direction of extremely unsound money, of massive borrowing in both the private and the public sector. We now have an economy that is saturated with debt: $54 trillion or $53 trillion – 3.5 times the GDP – way off the charts from where it was for a hundred years prior to the beginning of this. The idea that somehow all of that debt is irrelevant, as the Keynesians would tell us, is fundamentally wrong – and the reason why the economy can't get up off the mat.

We're doing all the wrong things. We're adding to the problem, not subtracting. We are not allowing the debt to be worked down and liquidated. We're not asking people to save more and consume less, which is what we really need to do. And so therefore I think policy is just making it worse, and any day now we will have another recurrence of the kind of economic crisis we had a few years ago.

[mojito]

The financial press is all abuzz that the Fed is going to announce QE3 in the next week or two. If you want to understand why and what is happening to the financial markets read the whole thing.

[foundedonpurpose]

I watched the video over the weekend (twice), worth seeing!!

[dfwgator]

"Sounds to me like you guys a couple a bookies..."

[Parmy]

Ping for later.

[Boogieman]

“We’re doing all the wrong things. We’re adding to the problem, not subtracting. We are not allowing the debt to be worked down and liquidated.”

... and we are doing all that on purpose. The average Keynesian may think this hocus pocus actually works, but the people with their hands on the levers know it won’t and they wilfully intend to crash the system by these methods.

[Alberta's Child]

I've never been a huge fan of David Stockman and often disagreed with his policy positions in the past, but this video is an absolute must-see. He really hits the nail on the head here, and offers some tremendous insight into the magnitude of the problem we're facing.

His most telling comment is that if he were elected President, his first step would be to resign.

[Freedom_Is_Not_Free]

It is the debt, stupid.

It is not accurate to say Obama caused this. He is a radical communist who is doing everything he can to make it worse, in order to collapse the system, Cloward Piven style.

But Obama did not cause this. This his been 40 years in the making. Baby Bush is as much to blame for this as Obama is. The debt problem goes way back.

[Alberta's Child]

In this interview Stockman does a great job of going through the history of the debt cycle. Remarkably, he even gives grudging attention to Ron Paul and his recommendation to disband the Fed entirely.

Great quote from his Wiki article:

"I invest in anything that Bernanke can’t destroy, including gold, canned beans, bottled water and flashlight batteries."

This guy sounds like a Freeper. LOL.

[Pining_4_TX]

Don’t the powers that be really know why people are not saving? Why save money, when the value of the dollar is going to be eaten up by inflation? Everything government has done in regards to monetary policy has been disastrous. Nixon was one of the worst presidents in our history. He may have been a Republican, but he was no conservative.

[zeugma]

Bookmark for later

[Colorado Buckeye]

Bump because it’s a thoughtful video.