Stockman Warns of Crash Of Fed-Fueled Bubble EconomyBy Richard Rubin
Apr. 02, 2013
Black Guy Walks Into Starbucks, Calls Them 'Racist,' Demands Free Coffee, Gets It Immediately
Laura Ingraham Interviews Comedian Who Requested Free Coffee From Starbucks As 'Reparations'
UK Journalist Visits Syria, Local Doc Tells Him Douma Victims Suffered From Oxygen Starvation, Not 'Chem Attack'
Syria Says U.S.-Led Strike Destroyed Pharmaceutical Research Institute Working On Cancer Drugs
David Hogg's Call For Boycott of Investment Giants BlackRock and Vanguard Falls Flat
The U.S. economy is in a bubble inflated by “phony money” from the Federal Reserve and will burst within a few years, warned David Stockman, who was budget director for President Ronald Reagan.
In an essay published yesterday in the New York Times (NYT), Stockman wrote that the Fed’s quantitative easing policies following the credit crisis have flooded stock markets with cash even while the “Main Street economy” remains weak. The combination, he wrote, is “unsustainable.”
“When it bursts, there will be no new round of bailouts like the ones the banks got in 2008,” wrote Stockman, a former senior managing director at Blackstone Group LP (BX) and a former Republican congressman from Michigan. “Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth.”