David Stockman is a voice of reason from the Three Empty Quarters.
David Alan Stockman (born November 10, 1946) is a former businessman and U.S. politician who served as a Republican U.S. Representative from the state of Michigan (1977–1981) and as the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.
David Stockman is critical of the financial bubbles blown by the Federal Reserve.
Jesse Felder published an incisive bubble finance chart over the weekend.
It is yet another reminder that Janet Yellen and her merry band of money printers are oblivious to the dangerous speculation and valuation excesses that their policies have implanted throughout the financial system.
Relative to disposable income, the value of household financial assets now far exceeds the last two bubble peaks.
And that has happened in an economic environment which suggests just the opposite.
To wit, valuation multiples and cap rates should be falling owing the fact that the productivity and growth capacity of the US economy has been heading south ever since the turn of the century.
Between 2007 and 2016, in fact, the value of household financial assets soared from $53 trillion to $72 trillion at a time when real personal income excluding transfer payments rose by only 1.2% annually.
Dangerous Bubbles In Plain Sight – David Stockman – 27 Sept 2016
Criticising the Federal Reserve is strictly taboo.
Criticisms of the Federal Reserve are silenced by slur [in the mainstream] by simply labelling them as: conspiracy theories, antisemitism and nativism.
The Federal Reserve System – also known as the Federal Reserve or simply the Fed – is the central banking system of the United States.
It was created on December 23, 1913, with the enactment of the Federal Reserve Act in response to a series of financial panics (particularly the panic of 1907) that showed the need for central control of the monetary system if crises are to be avoided.
Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s led to the expansion of the roles and responsibilities of the Federal Reserve System.
From the beginning, the Federal Reserve has been the subject of many popular conspiracy theories, many of which are examples of antisemitism or nativism.
Some causes of these conspiracy theories are that the general public has difficulty understanding the Fed’s complex organization, which differs from that of central banks in other countries, and that the issues of central banking are too complex for the general public to understand.
Donald Trump has not [yet] been silenced by slur.
All talk, no action.
Sounds good, doesn’t work.
Never going to happen.
Our country is suffering because people like Secretary Clinton have made such bad decisions in terms of our jobs and in terms of what’s going on.
Now, look, we have the worst revival of an economy since the Great Depression.
And believe me: We’re in a bubble right now.
And the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that’s going to come crashing down.
We are in a big, fat, ugly bubble.
And we better be awfully careful.
And we have a Fed that’s doing political things.
This Janet Yellen of the Fed.
The Fed is doing political – by keeping the interest rates at this level.
And believe me: The day Obama goes off, and he leaves, and goes out to the golf course for the rest of his life to play golf, when they raise interest rates, you’re going to see some very bad things happen, because the Fed is not doing their job.
The Fed is being more political than Secretary Clinton.
Donald Trump – US Presidential Election Debate – 26 Sept 2016
And David Stockman has not [yet] been silenced by slur.
Trump thereby landed a direct hit on the false Wall Street/Washington postulate that the Fed has been the nation’s economic savior.
And he also elicited an almost instant defense of its destructive, anti-capitalist regime of Bubble Finance – albeit in the guise of a “fact check” by the New York Times’ Fed reporter, Benyamin Appelbaum.
To wit, after 94 months on the zero bound the Fed has executed the most massive income and wealth transfer in American history.
Upwards of $2.5 trillion has been extracted from the hides of main street savers and retirees over that eight year period (@ $300 billion per year).
All of that and then some was gifted to the banks and Wall Street speculators.
Needless to say, a wealth redistribution that monumental in scope and capricious in impact would never see the light of day among the unwashed “politicians” that Appelbaum apparently thinks are too benighted to be involved in monetary policy.
That’s because whether or not they embrace the Keynesian nostrum that saving is bad and debt is good, the nation’s politicians are smart enough to know that the sweeping fiscal transfer at the core of Fed policy would be shouted down by the voters in a thunderous chorus of denunciation and derision.
Stated differently, the politician at least know that if the Congress were to enact anything remotely similar to the Fed’s savage and relentless attack on savers and wage-earners, they would be on the receiving end of the torches and pitchforks that would descend on the Imperial City.
The Donald Nailed It: “We Are In A Big Fat Ugly Bubble”
Conta Corner blog – David Stockman – 27 Sept 2016
That all pervasive hissing sound is caused by the deflation of Orwellian Economics and the associated hissy fits are triggered by the deflation of Orwellian Politics.