Financial Predictions from David Stockman

David Stockman is one of the favorite economic writers (Gary North is another one). They both write from an Austrian Economic perspective. That basically means that they oppose central bank manipulation of money and credit, I agree. Here is what Stockman recently said:

But here's the thing. Maybe 100,000 people "live large" off the casino. By contrast, according to the Social Security Administration's wage records, there were 100 million workers, or two-thirds of all Americans who held any kind of paying job during 2013, who earned a collective total of just $1.65 trillion that year.That amounts to the incredibly small sum of just $16,500 per average worker.

In short, full-time wage workers have been on a treadmill for decades; average pay for the overwhelming share of jobs celebrated by the talking heads on payroll Friday is pitifully low; and the central bank keeps its heavy foot on the monetary accelerator as it witlessly inflates a $95 trillion financial bubble that it stubbornly denies. I have called this a tale of two graphs. But what it really describes is a clear and present danger to American capitalism fostered by an unelected monetary politburo in thrall to its own lust for power and mesmerized by its own doctrinaire group think. The tragedy is that nothing can stop them except the thundering crash of the gargantuan bubble they have single handedly enabled.

The Federal Reserve Bank of the US has distorted markets to such an extent that unavoidable financial disaster lies ahead. Janet Yellen and the rest of the jedis at the Fed have created a Death Star weapon of mass financial destruction.

Here is what Gary North says about the looming financial and default of the feddle gummint.

That is when corporations will start laying off workers. The working people are going to get hammered, not by the fall of the stock market, but by the contraction that follows. That was what happened, beginning in 1930, and extending throughout the 1930's. The little people did not lose their money, except the money they had in banks -- 9,000 small banks. The rich got less rich, but they became paranoid. The government expanded, and investment ceased. When the rich get paranoid, and refuse to face the challenge of uncertainties, and they see salvation in terms of cost-cutting, that is when innovation slows, unemployment rises, and economic growth disappears. It happened in the 1930's, and I think it is going to happen again. It is certainly going to happen for the common wage earner.

Rich people are counting on their pensions. Pension hopes will be smashed in the next stock market crash.

Common people trust Social Security and Medicare, and these will be defended for as long as Congress can defend them. But, at some point, the money will not be there. The great default will call into question all of the dreams of the common people. At that point, all over the Western world, there would be massive competition for explanations as to why it happened, who did it, and what must be done to recover from it. That will be a time of great entrepreneurial opportunities for Austrian School economists.

Here where I present the explanation that North talks about. 

The Market - we should actually try it instead of just talking about it. No more centrally planned economic policies, no more banksters, creating trillions out of thin air to save their friends in a kind of heads we win, tails you lose arrangement.

Also, the reason for the coming great default and crash is the monetary manipulation by the Fed over the last 4 decades.