I’m not fond of recommending videos, especially long videos. However, this video interview of David Stockman, Budget Director during the Reagan Administration, is well worth the time.
Stockman reminds us of problems and developments that are being ignored. For example, Obama and Congress made a deal years ago to suspend the debt limit until March 15, 2017. That’s right, there was no debt ceiling during the last years of the Obama administration, but now the deadline is on us. Let’s see what the Trump administration does.
Stockman also predicts that
* the stock market will collapse
* US official debt is 106% of gross domestic product and is unsustainable
* there is a build-in $10 trillion deficit over the next ten years
* markets are not even remotely ready for maelstrom that is coming
* the “recovery” since the World Financial Crisis of 2008 is phony, the only recovery being in the financial markets, with main street being left behind
* there’s a massive reset of financial values coming
* central banks have failed completely
* the gold market is tiny compared with the financial markets and that even a small shift to gold will be significant
* all investors should be long gold.
I like the fact that Mr. Stockman is making fairly specific, clear, near-term, and thus highly-testable predictions. We should bookmark these specific claims he is now making, since we should know fairly soon if he is right or wrong! It’s important to hold such would-be economic prophets to account.
If Mr. Stockman turns out to be seriously wrong, then he should be identified clearly as such (e.g. as a “failed prophet”) in regard to any such future predictions that he may make. Now, since we can’t explore that future yet, let us ask ourselves if he has been right in the past.
I looked on Wikipedia (yes, I know it may be wrong). Hmm. His past investment strategies do not seem to have worked out particularly better than those of much more ordinary, not-so-famous, folks. He has even led some investors into bankruptcy. Evidently, he’s most famous for his holding high-level US Government positions, but his fame does not seem, at least based on the Wikipedia article, to derive from actually being correct. Jimmy Carter and Barack Obama are far more famous than him, but I sure wouldn’t trust their investment advice — would you? Bill, I encourage you to revisit this post later this year; it could be interesting!
IS there any chance, and if so, how much of one, that gold BEARS have any possibility of being correct; that gold will not do anything significant one way or another?
All the reasons listed above are very convincing, and have been known to the market for several years and yet spot gold isn’t much changed, and 2022 gold futures haven’t seen more than a 10% increase.
Gabe, good observations. I agree that most of these compelling reasons for owning gold have been known for years. However, they need to be known by a wider audience.
It is my hope that the media will quit talking about Trump’s latest tweet and start discussing the HUGE problems that the US faces. For example, a $10 trillion budget deficit over the next ten years already cooked into the books.
Won’t Trump’s deregulation of Wall St further, and more quickly push this Country over the edge? It seems to be pretty apparent that Trump has handed the steering wheel over to those that were a big part of the problems that led this country, and most of the world, into the 2008 collapse?
Corporate greed is blatantly and aggressively practicing predatory policies that show no concern for the people of this country, and have been fleeing the Middle Class to the extent that America is dying, and from which, she will never recover! The problem that we have going on here involves a paper money bubble; a stock and bond bubble, this will burst! It’s just a matter of time!
Gold? What will gold do, when anarchy and chaos becomes the next chapter? How could any of that be contained? Do United States and all its military might could not bring the Vietnamese people to their knees, but is there any power in this world that can bring the United States to its knees? The thing is, when United States experiences economic collapse, the rest of the world will follow! I believe it is far too late for any paradigm shift! I think the problem is, too many of our so-called brilliant Presidents listened way too much to Mr. Kissinger, who was so full of himself, We are all screwed!
I apologize if what I am forecasting here seems outside the realm of finances, and precious metals, and Wall Street and the list goes on, but the truth is, that list is way too long to even begin to get into here! Humanity is not approaching an extinction event–it may be approaching extinction events-plural! Well, someone did say, “may you live in interesting times!”
I have to agree with Allan.
Trump could not have arrived at a worst time to screw things up big time.
He is an expert on going bankrupt over and over again and will do the same to the country. If he paid back those he screwed, he would have nothing left.
Owning gold during the economic meltdown is equivalent to a toddler sucking his thumb and oblivious to the surroundings. Stock up on canned food and supplies and fill up a warehouse to help others.
March 15, 2017 has come and gone and I did no see any collapse. The dollar has not been devalued. Appears Mr. Stockman was wrong again.
I think that Stockman’s reference to March 15 was the date of the Fed’s third consecutive rate hike. His prediction is for a stock market collapse in 2017, not the dollar’s demise. However, the dollar will suffer when the Fed returns to easy money policies to ward off recession.