Well, no, that would be a bit arrogant — Dave has been talking about this stuff for a long time. But it is rare to see something like this in print:
Stockman suggests you’d be a fool to hold anything but cash now, and maybe a few bars of gold. He thinks the Federal Reserve’s efforts to ease the pain from the collapse of our “national leveraged buyout” – his term for decades of reckless, debt-fueled spending by government, families and companies – is pumping stock and bond markets to dangerous heights.
Uh, not just dangerous heights, unsustainble ones.
But where Dave doesn’t go, and should, is that it is in fact the government that provides most of the fuel for these games via deficit spending. Without it there would be none of the “official distortion” as there’d be nothing to engage in it with.
So let’s point the finger where it really belongs, shall we? It’s not just a problem with banks, or The Fed. No, the real rot lies in Congress, which loves to make political promises to spend money they don’t have, and then egg people on in blowing bubbles to cover up their malfeasance.
The problem is that all compound growth functions eventually terminate. They must, becasue it is physically impossible to have compound growth in a finite place on an indefinite basis. Yet nobody ever asks “but what about the groth ends?” when people talk about 3% inflation, 4% GDP growth, or the roughly 3% spread between debt and GDP accumulation over the last 50 years, just like nobody said “what happens when the 10% growth in house prices stops?”
The answer to that, if you’ve loaded up on leverage, is always the same:
Read the rest — it’s good — but don’t point fingers just at the private sector.
But for the government — either in its refusal to prosecute frauds or its intentional overspending — none of these games would be possible.
The head of the snake resides between Constitution and Independence Avenues, both words that have become utterly foreign to the viperous traitors within.