Stockman contends, \u201cThe Fed drove up costs, prices and wages at 2% come hell or high water…”<\/em><\/strong><\/p>\n “You do that for two or three decades and, all of a sudden, you are totally uncompetitive.<\/strong> You have the highest cost structure in the world economy, and the jobs and production migrate to where companies can find lower costs and better profits.<\/p>\n So, the Fed hit the economy and the middle-class, what I call fly-over America, with a double whammy.<\/strong> The Fed\u2019s 2% inflation drove jobs offshore and undermined wages and the middle-class economy. At the same time, it vastly inflated and subsidized a massive gambling spree and financial asset inflation on Wall Street…<\/p>\n Not only was this (Fed) policy the enemy of MAGA… it also created a dangerous distortion in the distribution of national wealth.<\/strong>\u201d<\/p><\/blockquote>\n Stockman points out that debt is the highest ever in almost every sector of the economy, and much of it is never getting paid back.<\/strong> Is there a big global default coming? Stockman says, \u201cYes, it is very likely…”<\/p>\n “…and this is why it is so dangerous to be in the stock market today because the whole thing is propped up by debt.<\/strong> As soon as the defaults begin to cascade through the system, there is going to be a tremendous correction. At the same time this debt was exploding from $40 trillion to $250 trillion (globally), the balance sheet of the central banks went from $2 trillion to $25 trillion…<\/p>\n The central banks of the world have taken their balance sheets from $2 trillion to $25 trillion in roughly two decades, and all of that is one giant fraud because to buy all those assets . . . they just made it up. It was fiat credit. They issued credit . . . made out of thin air. So, what we have in the world economy underpinning this $250 trillion of debt is a massively bloated and fraudulent central banking system and balance sheet that made all this possible.\u201d<\/strong><\/p><\/blockquote>\n Stockman goes on to say, \u201cThe key point is that it is all coming to an end<\/strong>…”<\/p>\n “Central banks are beginning to shrink their balance sheet for the first time in the last 20 years and not just a little bit…<\/strong><\/p>\n In the inverse, the opposite effect is going to happen. Bond prices are going to fall . . . Yields are going to rise… You hear from Wall Street and Fed Heads don\u2019t worry, it\u2019s all priced in. . . . That\u2019s all complete baloney.<\/strong> It\u2019s not priced in. Yields are going to go up, and we are going to have a day of reckoning in terms of this whole massive artificial structure of debt that\u2019s been created…<\/p>\n The growth rate is a third of what it was historically… there is no magic way out of it. So, I call it a \u2018Fiscal Doomsday Machine.\u2019\u201d<\/strong><\/p><\/blockquote>\n Stockman has been touting gold as a must-have insurance policy.<\/strong> Stockman says,<\/p>\n \u201cThe essential attribute of gold is that it is a contra central bank asset. It\u2019s the one asset that can\u2019t be influenced, manipulated, created or destroyed, for that matter, by the central banks.<\/strong> It\u2019s the one asset that history has proven, without a doubt, can retain its value regardless of the mayhem and financial disorder caused by governments….<\/p>\n Gold is the alternative asset to a bubble ridden financial system that is driven by the central banks.\u201d<\/strong><\/p><\/blockquote>\n Join Greg Hunter as he goes One-on-One with David Stockman, best-selling author of the brand new book called \u201cPeak Trump.\u201d<\/strong><\/a><\/p>\n![\"\"](\"https:\/\/www.zerohedge.com\/s3\/files\/inline-images\/2019-02-06_5-24-05.jpg?itok=msyHydcF\")
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