In this interview with David Stockman, Ronald Reagan’s budget director, he outlines a very bleak economic picture. Despite the rise in the stock market and the constant cheering from CNBC, he tells it like it is and it’s not very good.
He identifies the main disease as debt, and he couldn’t be more right. The entire world economy is leveraged and at some point there will have to be a deleveraging, though the Fed and other central banks will do all they can to keep the day of reckoning from happening for as long as they can. Once the central banks stop printing for whatever reason, however, there is going to be hell to pay.
At one point the interviewer asks about Stockman’s investments which are a combination of cash and gold. The interviewer points out that Stockman isn’t “making any money.” Stockman responds by saying that in an economy such as ours preservation of capital must be “first, second, and third priority.”
Interestingly, though Stockman calls for an end to the Bush tax cuts, he also outs himself as a libertarian, at least for the USA Today readership.
We look forward to his forthcoming book, The Triumph of Crony Capitalism.
For our readers who want even redder meat I suggest the below article.