 (Untitled) Oct 5th 2013, 23:46, by noreply@blogger.com (Cliff Küle) Saturday Night Special David Stockman*: This Financial Collapse Will Be Catastrophic "The Federal Reserve is kind of paralyzed and frozen, simply making up one excuse after another for delaying the day of reckoning. This isn't a good thing because it's going to shatter confidence. Therefore, the markets are becoming increasingly unstable .. I think they are extremely dangerous because the heart of capitalism is the financial markets, and they have completely destroyed .. price discovery .. It's all part of a doctrine that's destined to blow up in my judgement .. The end game is going to be catastrophic. The market has bid up financial assets of all types, and if confidence is ever broken due to an unexpected event, a black swan, or a Lehman event, I think there will be massive selling. There won't be any bids, and the Federal Reserve will be hard-pressed to make a new rescue regime .. interest rates are already at zero, it can't radically drop them like it did .. Sooner or later the Federal Reserve can't print enough money, buy enough bonds, or inject enough liquidity into the market to prevent real pricing from reemerging. And when it does the price of everything will be reset much lower. There will be huge losses. All of the leveraged positions will be unwound, and it will start a general contagion in the financial system which will rip through all categories of assets with extreme speed and violence. And so if we know that everything is artificially and dramatically inflated, when the correction comes and the bubble bursts, it's going to be severe. I don't see how the elevator, which is going to plunge down the shaft, gets stopped this time around .. This doctrine of monetary central planning is so destructive and dangerous. No twelve people should be in a position to unleash this kind of turmoil.' .. 23 minutes audio interview- David Stockman* LINK HERE to the audio interview |
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