Stockman: “After March 15 Everything Will Grind To A Halt”

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Two weeks after David Stockman warned that “the market is apparently pricing in a huge Trump stimulus. But if you just look at the real world out there, the only thing that’s going to happen is a fiscal bloodbath and a White House train wreck like never before in U.S. history” and exclaimed that, when looking at markets, “what’s going on today is complete insanity” he is back with another interview, this time with Greg Hunter of USAWatchdog in which he, once again warns, that a giant fiscal bloodbatch is coming soon, and urges listeners to pay especially close attention to the March 15, 2017 debt ceiling deadling, at which point everything could “grind to a halt.”

As Greg Hunter writes, former Reagan Administration White House Budget Director David Stockman says financial pain is a mathematical certainty. Stockman explains, “I think we are likely to have more of a fiscal bloodbath rather than fiscal stimulus.  Unfortunately for Donald Trump, not only did the public vote the establishment out, they left on his doorstep the inheritance of 30 years of debt build-up and a fiscal policy that’s been really reckless in the extreme.  People would like to think he’s the second coming of Ronald Reagan and we are going to have morning in America.  Unfortunately, I don’t think it looks that promising because Trump is inheriting a mess that pales into insignificance what we had to deal with in January of 1981 when I joined the Reagan White House as Budget Director.”

So, can the Trump bump in the stock market keep going? Stockman, who wrote a book titled “Trumped” predicting a Trump victory in 2016, says, “I don’t think there is a snowball’s chance in the hot place that’s going to happen. This is delusional.  This is the greatest suckers’ rally of all time.  It is based on pure hopium and not any analysis at all as what it will take to push through a big tax cut.  Donald Trump is in a trap.  Today the debt is $20 trillion.  It’s 106% of GDP. . . .Trump is inheriting a built-in deficit of $10 trillion over the next decade under current policies that are built in.  Yet, he wants more defense spending, not less.  He wants drastic sweeping tax cuts for corporations and individuals.  He wants to spend more money on border security and law enforcement.  He’s going to do more for the veterans.  He wants this big trillion dollar infrastructure program.  You put all that together and it’s madness.  It doesn’t even begin to add up, and it won’t happen when you are struggling with the $10 trillion of debt that’s coming down the pike and the $20 trillion that’s already on the books.”

Then, Stockman drops this bomb and says:

“I think what people are missing is this date, March 15th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash.  We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash.  Then we will be in the mother of all debt ceiling crises.  Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

Stockman also predicts very positive price moves for gold and silver as a result of the coming budget calamity.

There is much more in the video interview below in which Greg Hunter goes One-on-One with David Stockman.

 

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Westcoaster
Westcoaster

Great interview. The good news is this hard stop on 3/15/17 gives Trump the equivalent of a line-item veto on the budget. That should make things interesting.
BTW Greg Hunter’s site is http://www.usawatchdog.com and it’s a good one to add to your bookmarks.

Hollow man
Hollow man

Chaos is coming. Why not March 15.

B LEVER
B LEVER

If Washington shut down would you care? The government in Belgium shut down for two years once and everything went extremely well. Coming up on the two year mark, the citizens began to clamor that they didn’t need any new laws and questioned a permanent closure. TPTB freaked out and set the wheels back in motion.

I/S says cut off the money and the war stops, I think he is right. Can’t wait for 03/15 but I predict the bloated behemoth will be funded to keep the dindus in check and the war machine greased.

rhs jr
rhs jr

Trump should cut the Gordian Knot of Welfare, Bureaucrats & Regulations, Alphabet Agencies and Global Waring.

Wip
Wip

Don’t miss out on the Snapchat IPO. I’m telling you…it’s a no brainer.

bryan
bryan

“Beware the Ides of March”. There, someone had to say it.

Ouirphuqd
Ouirphuqd

March 15, wonderful, didn’t want to do taxes anyway. I never get money refunded so this will be a first!

Anonymous
Anonymous

Minimize your taxes in the first place, there are all kinds of fully legitimate ways to do this, and you won’t mind so much.

Most people just don’t make the effort to avoid incurring excess tax liabilities by all the means available to them (but are usually quick to jump into criticism of those that do).

FWIW, getting a tax refund just means you paid too much during the year, more than you actually owed, and loaned your money to the government interest free. I prefer to end up owing the government a small amount to getting a refund from them for my excess payment.

kokoda - the most deplorable
kokoda - the most deplorable

Correct – I avoid letting the gov’t holding my $2,000 and now I get to reap all that interest. I’m swimming in money.

Anonymous
Anonymous

Reap interest or invest it something that will provide a better return.

The latter probably a better idea than the former.

javelin
javelin

I hope I get my tax return before the 15th…also
Oh shitt, this actually could be the thing that sends us into chaos for a while. There is no hope at this point, kick the can a little further or watch it all unravel…………

javelin
javelin

I’d also like to add–and I’m not one for making or giving much credence to predictions–but I believe fully that $18.50 silver and $1250 gold are going to look like bargains by June 1st….we’ll see if I was just an alarmist or a bellwether in a few short months.
Either way, we’ll be 2 steps closer to the edge or 1 step over the edge.

EL Coyote
EL Coyote
javelin
javelin

think I had this on a 45 when I was a little kid

Anonymous
Anonymous

Simple highs and lows aren’t what should be watched, the moving average is.

That’s where you will notice the trends and bargains and know when to get in and out.

Right now, I’m thinking keep an eye on Palladium.

Vic
Vic

America started with just the states, which were basically countries in their own right, and they did OK by themselves. The Feds are simply a duplicate on top of states.
According to the Federalists, the U.S. gov was only supposed to deal with things outside of the U.S. and the states were to do deal with things inside the U.S. Well, that idea disappeared quick.
Every department except defense and state (we really only need ambassadors) should be closed and let the states handle it. All intelligence should be part of the military.

Suzanna
Suzanna

Vic,
not a duplicate…rather a leech and a leash.
Yours is a great response.

Dr. Doom
Dr. Doom

Its mathematically impossible to keep doing this. Whether they blame Trump or talk “deals” that can has reached the end of the road. The debt is bad, but what’s worse is they NEVER pay any of it back. The interest alone is approaching a Trillion Dollars. Let that sink in. A Trillion Dollars spent every year, and not one cent of debt is EVER PAID BACK. They borrow a Trillion every year to make ends meet. Soon every dollar borrowed will go to finance the debt by just paying interest. That point where both the borrowing and obligations are exactly equal is the endpoint. After that, they’re broke. All the checks start bouncing. Only vital services get funded, and for all intents and purposes, Uncle Sham is BROKE. When? SOON.
The Stock Market is meaningless. It has no value in it anymore. Its all bubble. Worthless stocks like fakebook and Google are valued at over a hundred times revenue and assets. That’s crazy.

Mark
Mark

There is a dollar shortage with collapse of the Euro comming.

Foreigners will be happy with negative Real U.S. dollar interest rates as opposed to bail ins coupled with higher taxes.

So theiir will be no shortage of buyers for low yielding bonds. The strengh of dollar and its impact on domestic employment has to be our main concern.

Anonymous
Anonymous

Most people don’t think that way, that’s why they get surprised when what they are thinking doesn’t happen or turns out wrong.

Barring global catastrophe, I’d rather be in the dollar now than any other currency. It may not be going to do much but it’s safer.

IMO.

starfcker
starfcker

Pay a little more attention, guys. This isn’t an interview, it’s a commercial.

DC Sunsets

Everyone is always trying to sell you something. I, too, got seriously tired of it.

No one….NO ONE….knows the future. We can speculate on what is likely, but the single most important element is TIMING, and I’ve paid multiple college degree prices to learn that neither I nor anyone else can know that one.

TrickleUpPolitics
TrickleUpPolitics

All this doom and naysaying is upsetting because there is not one damn thing any of us can do about it. Can we talk about something else please?

Anonymous
Anonymous

It’s more fun to talk about doom and gloom than, say, the best flower arrangements.

Suzanna
Suzanna

…talk about prepping, and start with having some cash
at home, in case your bank has a “glitch”…

Anonymous
Anonymous

But that’s based on talking about doom and gloom as the basis for it.

Flowers are a much more pleasant subject.

And rainbows, don’t leave out rainbows.

goofyfoot
goofyfoot

Hello America? This is your Captain speaking, we have reached our cruising altitude of 37k feet, aka 20 trillion $’s. Unfortunately, the plane you’re riding in is about to run out of fuel, and you all know what happens next. Don’t bother putting up your tray tables. I would also avoid the black lady in the aisle bleeding from her vagina . Thanks for flying In-Debt Airlines.

DC Sunsets

People have gone broke numerous times attempting to call the end of this 50 year period of insanity.

I will NEVER attempt to make money in a down market again. There, I said it.

In order for a market to enter a massive decline, it must first preclude early capitulation (lows form from capitulation.) It does so by teaching observers that only fools sell out. Only fools capitulate.

Remember OIL?! When it was >$120 everyone was talking about how we were running out of it. The only path ahead was up. In 2008 it hit $147 and then collapsed in the largest, fastest price decline for any commodity in history to about $30 over a few WEEKS! How many people got wiped out in that?

Then it climbed back up to about $110, and then went down to below $30.

In order for that to happen, people had to largely believe it was impossible.

If I am right, the vast credit inflation of the last 35 years has to mostly disappear, and coincident with that should be the largest deflationary collapse in prices EVER. While it’s not a prediction, a collapse back to the stock prices of the late 1970’s is possible. That’s like a 95% or more decline from here.

The washouts of 2000-2003 and 2007-2009 were followed immediately by rapid, almost magical returns to new highs. This taught people to NEVER capitulate. Those who sold near the lows of ’03 and ’09 were CREAMED.

The difference (in hindsight) is that it was always about bond prices (and interest rates.) Wish I had known that back then.

Will this thing end in March, or July, or some other time? Beats me. I don’t care, I don’t own any stocks, and my tiny GLD position is rather meaningless (and doesn’t correlate to stocks anyway.) I’m just a passenger on this vast Titanic, and I’ve never taken my eye off my family’s spot in a lifeboat.

flash
flash

Credit is money. The national/global economy is ran on credit. The men who have the power to issue or cut credit hold the fate of empires in their hands. Trump has no power over this situation. If credit is cut, the economy crashes hard and the God Emperor -whom I support BTW – will be blamed thus authority born of populism goes down in flames. It is what it is and nothing can deny the power of the money masters to inflict financial pain across the globe. Repercussions notwithstanding.

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