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Stockman Warns of Crash Of Fed-Fueled Bubble Economy

Better reread this: WHEN WILL THE U.S. TREASURY DEFINE THIS AS TREASON AND TRADING WITH THE ENEMY?
 http://portland.indymedia.org/en/2013/03/422571.shtml

author: Multiple
This explains it all! SO PAY ATTENTION! [VKD]
The U.S. Treasury's Office of Foreign Assets Control found that JPMorgan had illegally aided dictatorships in Cuba, Sudan, Liberia and Iran, including transferring 32,000 ounces of gold bullion for an Iranian bank.
You will find the Banks, Bank accounts and ABAS at: link to beforeitsnews.com


JPMorgan Chase Still Going Strong Despite Paying Billions for Long List of Misdeeds
Posted by Charleston Voice
(It should go without saying so, but will: these fines and penalties are expenses borne by shareholders and JPM clients.) read more
 http://chasvoice.blogspot.com/2013/03/jpmorgan-chase-still-going-strong.html
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Stockman Warns of Crash Of Fed-Fueled Bubble Economy
 link to www.bloomberg.com

By Richard Rubin - 2013-04-01T04:01:00Z
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 in the aftermath of the credit crisis have flooded stock markets with cash even while the "Main Street economy" remains weak. The combination, he wrote, is "unsustainable."Douglas Healey/Bloomberg

David Stockman, who was budget director for U.S. President Ronald Reagan, is the author of "The Great Deformation: The Corruption of Capitalism in America," which will be published April 2.


David Stockman, who was budget director for U.S. President Ronald Reagan, is the author of "The Great Deformation: The Corruption of Capitalism in America," which will be published April 2. Photographer: Douglas Healey/Bloomberg

"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."

Stockman, 66, is the author of "The Great Deformation: The Corruption of Capitalism in America," which will be published April 2.

The Fed, led by Ben S. Bernanke, is purchasing $85 billion in assets every month. The Fed is leaving its key interest rate near zero while it tries to reduce unemployment below 6.5 percent and hold inflation below 2.5 percent.

The Standard & Poor's 500 Index (SPX) rose to an all-time high last week, closing at 1,569.19 on March 28. That surpassed the previous record of 1,565.15 set in October 2007. U.S. stock markets were closed March 29 for the Good Friday holiday.

Gold Standard
Among the other culprits Stockman blamed for what he termed a "state-wreck" are President Franklin Delano Roosevelt for weakening the gold standard in 1933, President Richard Nixon for removing the convertibility of dollars to gold and "lapsed hero" Alan Greenspan, the former Fed chairman, for keeping interest rates too low for too long.

Investors will sell, Stockman wrote, at any hint that the Fed is starting to remove assets from its balance sheet.

"Notwithstanding Bernanke's assurances about eventually, gradually making a smooth exit, the Fed is domiciled in a monetary prison of its own making," he wrote, warning of unsustainable fiscal policies as well. "These policies have brought America to an end-stage metastasis. The way out would be so radical it can't happen."

Paul Krugman, the Princeton University economist and New York Times columnist, responded on his blog yesterday, saying that he was "disappointed" in Stockman's "gee-whiz, context- and model-free numbers embedded in a rant -- and not even an interesting rant."

Krugman called Stockman's piece "cranky old man stuff," and summarized it this way:

"We've been doomed, yes doomed, ever since FDR took us off the gold standard and introduced unemployment insurance. What about those 80 years of non-doom? Just a series of lucky accidents. Now we're really doomed. I mean it!"

To contact the reporter on this story: Richard Rubin in Washington at  rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at  jschneider50@bloomberg.net