Wednesday , 19 September 2018

David Stockman: The Market Is “Rigged For Implosion” – Here’s Why

David Stockman predicts that a Great Reset is imminent. One that, for those who see it coming and take prudent action today, will offer tremendous, perhaps once-in-a-lifetime, investment opportunity once the dust settles.

The original article has been edited here by munKNEE.com for length (…) and clarity ([ ])
(Few people alive today understand the global economy and its (mis)management better than David Stockman who is the former director of the OMB under President Reagan, former US Representative, best-selling author of The Great Deformation, and veteran financier…[That] is why his perspective is not to be dismissed lightly. He knows intimately how how our political and financial systems work, as well as what their vulnerabilities are.)

Stockman warns that the global economy has reached an “epochal pivot”, a moment when the false prosperity created from $trillions in printed money by the world’s central banks lurches violently into reverse.

Stockman thinks the top for the current asset price bubble era is in. Specifically, he thinks it hit its apex in January 2018. As this “Everything Bubble” prepares to burst, Stockman estimates the risk of economic crisis is as great, if not greater than, the 2008 Great Financial Crisis because of the radical and unsustainable monetary policy expansion the central banks have pursued over the past decade and this has caused the prices of stocks, bonds, real estate and most other assets to appreciate at rates that have no basis in the ongoing income/cash flow of the global economy. In short, they are wildly overvalued.

A key condition that Stockman has been waiting to see – that serves as a signal the bubble’s bursting is nigh – is the concentration of speculative capital into fewer and fewer stocks as the “good” options for investors shrink. We now clearly see this in the FAANG complex…[for example].
Stockman’s main warning is that there’s no bid underneath this market — that when perception shifts from greed to fear, the bottom is much farther down than most investors realize. In his words, it’s “rigged for implosion”.

Leave a Reply

Your email address will not be published. Required fields are marked *