Stockman: The End is Nigh!

Quoting former Reagan OMB director Stockman over at Pajamas Media:

…The state-wreck ahead is a far cry from the “Great Moderation” proclaimed in 2004 by Mr. Bernanke, who predicted that prosperity would be everlasting because the Fed had tamed the business cycle and, as late as March 2007, testified that the impact of the subprime meltdown “seems likely to be contained.” Instead of moderation, 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.

These policies have brought America to an end-stage metastasis. The way out would be so radical it can’t happen. It would necessitate a sweeping divorce of the state and the market economy. It would require a renunciation of crony capitalism and its first cousin: Keynesian economics in all its forms. The state would need to get out of the business of imperial hubris, economic uplift and social insurance and shift its focus to managing and financing an effective, affordable, means-tested safety net…

Stockman notes that no one in power is going to do any of the things necessary to fix the problem – last week, I read a quote attributed to the Prime Minister of Luxemburg which went along the lines of, “we all know what needs to be done, but we don’t know how to get re-elected after we do it”.  Whether or not the PM said any such thing, it is precisely why our Ruling Class won’t make the necessary changes – because to make them means that whomever does it loses the next election, big time.  I agree with Stockman on what is wrong and why it won’t be fixed – I don’t agree in his laying a great deal of the blame for changing the budget dynamic on Reagan, mostly because Stockman still carries a grudge from waaaay back when…Reagan rejected some of Stockman’s policy ideas in the mid-80’s and Stockman hasn’t quite gotten over it, but his claim that Reagan brought us to fiscal irresponsibility is absurd given that Social Security – the first step in complete fiscal irresponsibility – came about nearly 50 years before Reagan.  That said, the basic thrust that things are collapsing and that it has been a bi-partisan effort to wreck things is completely true.

What do to?  Stockman advises to get out of stocks and bonds and in to cash – not so sure that is the way to go because our cash is already devaluing and will do more so as time goes on with Bernanke continuing to print.  Still, getting out of debt and having as much cash on hand as possible is a good idea – gold, silver and a supply of canned goods also isn’t a bad idea, either.  The main thing is to be prepared for a very rough time, and not too long in the future.  How long?  I don’t know.  No one does.  Could happen tomorrow – could hold off for five years.   Something will trigger the final collapse – our entire economic world is based upon fake money and debt and in a very real sense, the amount of debt in the world exceeds the ability of the entire world to pay for it. And the thing about debt that can’t be repaid is that it doesn’t get repaid.

I’m not at all worried or frightened about this.  We’re going to pay the piper for 80 years of sheer idiocy in government and economics.  A better and wiser people will emerge from the collapse.

UPDATE:  Stockton, CA, goes bankrupt.

UPDATE II:  Eurozone unemployment hits 12%.  Glad that we haven’t gone down their route of fake money and massive debt…oh, wait…

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24 thoughts on “Stockman: The End is Nigh!

  1. Jeremiah

    I suspect that when the crash comes there will be a lot of civil unrest around the country.
    Hopefully a spiritual revival will come to America during the process. One can only keep their fingers crossed.

    1. neocon01

      Jer,

      One can only keep their fingers crossed.

      or a plague limited to Washington DC.
      Trolls = (sarcasm not wishing for any one’s death)

      1. neocon01

        Mark

        A better and wiser people will emerge from the collapse.

        Nah, only for a generation or two then everybody forgets…
        history DOES repeat its self and free market economies collapse every 50-80 years.
        ———————————————————————————
        Here is a great article………

        The truth is that we should have listened to the warnings of our founding fathers about government debt. For example, Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a complete ban on all borrowing by the federal government….

        I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

        Where would we be today if we had taken the advice of Thomas Jefferson?

        http://theeconomiccollapseblog.com/archives/27-things-that-every-american-should-know-about-the-national-debt

      2. neocon01

        #18 Mandatory federal spending surpassed total federal revenue for the first time ever in fiscal 2011. That was not supposed to happen until 50 years from now.

        while king putt plays on OPM,with reggie LOOOVE!
        the Mooch goes on ANOTHER lavish vacation with the girsl
        the innercitys flow with blood and drugs.

        and they want OUR GUNS. Molon Labe!! / Dont tread on US!!

    2. neocon01

      Jer

      you aint seen nothing yet, to what is coming will

      MEANWHILE in our “GREAT RECOVERY” and in dear leaders home town governed by his hand picked chief of staff XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Give it a rest or we will just start to delete whatever you post no matter what it says. No more games no more “ahem” no more trying to get around it. You have made your point. Move on. //Moderator

      CHICAGOLAND:

      Girl gang on train had box cutters, padlocks in socks…

      400 teens attacked pedestrians along ‘Magnificent Mile’…

      23 shot in city over Easter weekend…

      Cook County begins $25 gun tax…( on LEGAL guns of course)

      1. Jeremiah

        you aint seen nothing yet, to what is coming will

        You are right, Neo.
        As the jobless rate and unemployment continues to climb, so does the number of people having to pay more taxes, and the less we have in the bank.

        If the Supreme Court rules to allow homosexuals to marry, then that will lead to our economic downfall, as well. Many people do not like to work in an environment where there is the possibility of hostility toward them and their fellow workers. Thus, more unemployment claims will rise.

        So, our economy can’t survive much longer with the way the government is taxing, and spending for behavior that is unacceptable.

  2. Retired Spook

    Something will trigger the final collapse

    You and I have been saying that for about 3 years, Mark. I still think we’ll be proved right, but, like you, I have no idea when. I do agree that there will be some kind of “trigger” event, and that the collapse will happen very quickly. What kind of event? The list of possibilities is almost endless, but, if I had to guess, I’d say it’s likely to be a disruption of a significant portion of our power grid. As I said to our email forum the other day, watching what Progressives are doing to this country is sort of like sitting in a lawn chair in your front yard, watching your house burn down while the fire fighters stand out in the street and argue about which hose to use.

    1. M. Noonan Post author

      Spook,

      Truth be told, I think that in the future historians will date our final collapse to Bernanke’s QEInfinity – that was such an absurd thing to do and so clearly designed to allow the Zombie Banks to continue functioning that in retrospect it will be seen as the point of doom.

    2. ricorun

      My previous comment seems to be perpetually “awaiting moderation”. So let me shorten it by responding to Spook’s comment: “If I had to guess, I’d say it’s likely to be a disruption of a significant portion of our power grid.” with this: I think most security analysts would agree with you. After all, our existing power grid is exceedingly susceptible to cyber attacks. So what better solution is there than to democratize the grid to the point where individual communities — or even individual households, and commercial, and municipal entities, etc. — could exist off it for extended periods of time? The technology exists right now, and at a cost that is rapidly decreasing. The only big hurdle left is to change the financing, siting, production, and transmission regulations to meet that new reality. And that, I think, is in everyone’s best interests — provided you’re not heavily invested in a utility, a coal mine, or some other interest dedicated to perpetuating the status quo.

  3. GMB

    I would also recommend being able to grow your own food and purify your own water. Gold and silver are nice as far as trade goods go but tobacco and alcohol would be even better. If you know how to build a still, get to practicing now.

    Learning how to reload you own ammunition is a skill I can not stress too much the importance of having. If you do not possess the right tools it is a bitch of a job as far as cartridges go. Shot gun shells not so much if you know what you are doing.

    If you plan on living on the fringe like some of us, do not get to in love with your property or land. Chances are you will have to move frequently. There are several good books about Tito,s partisan movement in Yougoslavia during World War 2. You should read them if you plan on resisting the Thomas’s of this world.

  4. Cluster

    I don’t have a crystal ball, so I have no idea what is on the horizon. I agree that a collapse is possible but I tend to think that Americans are more resourceful than that and will ultimately avoid the calamity. We are at a point now that we can still turn it around, but it will require substantive reforms of tax codes and entitlements and I just hope that we start that turn around next year. The people that will be hurt will be the ones that relied on government for either entitlements of cronyism.

  5. bardolf2

    COMPLETELY off topic but I’m applying a mixed GMB/Wall Street strategy. Specifically I’ll be working and getting ready for a worst case scenario. BUT in case things don’t go to hell in a handbasket.

    My daughter was admitted to both Harvard and Yale class of 2017!!

    1. neocon01

      Dr. B.

      My daughter was admitted to both Harvard and Yale class of 2017!!

      hope you can afford BOTH!!

      1. bardolf2

        Thanks Neo

        Actually, both schools make sure that you can manage the costs without taking any loans. They are both better deals than sending her to UC Berkeley, Texas or a Big10 school.

      1. bardolf2

        Thanks

        She is pretty amazing. I think Clarence Thomas once remarked about looking in malls and libraries on Saturday mornings to see where children will be in the future.

    2. ricorun

      Awesome dude! You must be very proud. BTW, don’t let anyone at Harvard know she was accepted at Yale, and vice versa. No need to get their ties in a bunch.

      1. bardolf2

        Thanks!
        I think the schools have a healthy rivalry and their own ways of finding out about the cross admits. She knows a few other students from science competitions who are attending both campus open houses.

    3. Retired Spook

      My daughter was admitted to both Harvard and Yale class of 2017!!

      I assume you meant accepted, not admitted, but on the outside chance that I’m wrong, how exactly does that work? Does she attend Yale in the morning and Harvard in the afternoon, alternate semesters?

      And congratulations whatever the explanation.

      1. bardolf2

        “Our faculty and students extend a special invitation for you to come to Cambridge during VISITAS from Saturday, April 20 to Monday, April 22. At this weekend-long celebration for all admitted students, you will meet current undergraduates, faculty, and other members of the Class of 2017.”

        Thanks for the congrats!

  6. M. Noonan Post author

    James,

    Just keep whistling past the graveyard – its not just me. This is David Stockman – who many years ago became a hero on the left because of his disagreements with some of Reagan’s policies. There are voices from the far left to the far right saying the same thing as Stockman…the same sort of things I’ve been saying since late 2008.

    You can say, “well, you’ve been doom and gloom for years, and a complete collapse hasn’t happened”. To that I answer – it hasn’t? Goodness, why do you think Bernanke switched over to QEInfinity? Bernanke essentially said he’d print an endless supply of money – he’s doing this because without an endless supply of money, our major banks would collapse. They are in such bad shape that only free money can allow them to pretend their balance sheets are healthy. Take away the free money and, boom, they’re gone within a week. But here’s the kicker – Bernanke can’t really provide an endless supply of free money. Eventually all that free money will, itself, cause a collapse. We’re caught in a bind and have no way out except through an economic collapse which will de-leverage us out of our unpayable debts and allow us to start rebuilding.

    If you can’t see economic death in a world where savings are punished and Wall Street gambling is rewarded, then I don’t know quite what to say to you.

  7. neocon01

    Mark

    If you can’t see economic death in a world where savings are punished and Wall Street gambling is rewarded, then I don’t know quite what to say to you.

    the terms useful idiots and drone apply here.

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