When The Third Bubble Pops, The Day of Reckoning Will Come
[Ed Note: Our friend David Stockman took to CNBC’s airwaves yesterday. Here’s his full interview…]
Here are a few highlights from my recent interview with CNBC’s Jackie DeAngelis:
-> “This is a massive windfall to the 5 percent or 1 percent” wealthiest American households. This prosperity we’ve had in the top 5 percent — and that’s where most of the consumption growth has been — is entirely a function of artificially ballooning stock prices and other risk assets.”
–> Obama “is talking about a symptom, but he’s clueless as to the cause. The cause is not capitalism. The cause is not some entrepreneur out there trying to invent something and improve the performance of his business. The problem is in the Eccles building [home to the main office of the Fed] and in the 12 people sitting there and thinking that interest rates are some magic elixir that’ll cause this very troubled and difficult economy to revive. It’s not true. These people are dangerous and destructive, and they’re creating this massive income inequality that, sooner or later, is going to cause a huge political reaction.”
-> “We’ve had two huge bubbles that collapsed already in this century. When this third bubble collapses — and surely it will — I believe that will be the day of reckoning. The credibility of all this central-bank-dominated, Wall-Street-coddling policy will be totally repudiated, and maybe then we can clean the slate and start over.”
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