Tuesday, June 21, 2011

Stockman: Warns on U.S. “Bond Armageddon”; First Default Could Be to IMF

David Stockman, former Budget Director under Ronald Reagan, told CNBC's Nicole Lapin that the first default by the United States government could be a payment to the International Monetary Fund. Lapin reports:
He said that this careless “shoveling” of money could lead to a default here in the U.S.— and suggested that the first default will be on our payments to the IMF.
Overall, Stockman doesn't think much of the IMF or what the rescue attempts of the PIIGs are doing in Europe. Lapin again:
We’re doomed on both sides of the pond, he told me on the set of “Worldwide Exchange,” and he didn’t hold back in name-calling the “lunatics” responsible for our global fiscal mess—especially the EU and the IMF.

In Europe, Stockman raged against a dichotomy of tax and debt slavery created by the EU: “They're attempting to go turn the prudent Europeans of the north into permanent tax slaves in order to bail out the big banks in France and Germany and elsewhere who don't deserve a bailout,” he said, adding that, “In order to accomplish that, they will attempt to turn the millions the of people who live in southern Europe into permanent debt slaves in order to pay the piper from the guarantees coming from the north.”...“The IMF is an absurd institution,” he said. “It's destructive. It's the source of holding this whole thing together with bailing wire.”

“And the sooner their number is called, he said, “The better off I think we'll all be.”
What does he think of the U.S. situation? He told Lapin:
First off, as an investor, he’s short bonds and warned me of “bond Armageddon,” where rates could potentially go up to five percent.
This is the second warning in the last seven days on the bond market. Greenspan also warned recently about the debt market. When these guys are in office serving the power elite, they rarely speak truth to the masses. But guys like Stockman and Greenspan are not dumb. They see what is coming and they know it is best to position themselves as wise seers. Do not take their warnings lightly. This is no time to be holding long-term bonds. As I have said many times, when interest rates start to climb, the climb will be fast and furious. Bernanke will attempt to suffocate the rate climb by printing more money, but this will only result in higher price inflation and an even higher price inflation premium built into interest rates.

Stockman is very correct that interest rates could climb 500 basis points very rapidly. In 2007, before the financial crisis hit, one-month Treasury bills traded as high as 5.24%, now they trade at 0.02%, so just getting us back to the pre-crisis period suggests a 500 basis point hike.


  1. "When these guys are in office serving the power elite, they rarely speak truth to the masses." Hence the incomprehensible gibberish known as "Greenspanish" when he was in office. Articles undeciperable. Interviews meant to deceive.

    "But guys like Stockman and Greenspan are not dumb." No, they are not, they are very well-paid con men. One knighted by the queen of England for serving the owner of the Federal Reserve bank so well.

    Whose interests does Stockman represent now? Pete Peterson, the life-long opponent of Social Security.

    Stockman: bringing Greek "austerity" to the serfs of the US....to serve his billionaire masters. Like he always has.


  2. "But guys like Stockman and Greenspan are not dumb. They see what is coming and they know it is best to position themselves as wise seers."

    LOL! Like Greenspan saw into the future as Fed Chairman and saw the collapse of Lehman, Bear Stearns, AIG? Who writes this crap? Have you guys watched the documentary, "Inside Job"? Apparently not or you wouldn't spread such lies as these. Pffffffffff

  3. As someone living in "northern Europe" I testify to the calamities that are happening here. Anyone who doesn't believe things are going down needs to get their head examined. The IMF and European Union alike are hated with a vengeance by millions of people here; the strangulation being inflicted on nation-states like Greece is unbelievable.
    The Ponzi-Scheme has been exposed and, like all Ponzi schemes, they fail; no amount of shovelling will change or prevent the inevitable. We are at the top of the pyramid looking down to the ground, and that's where it's all going to fall; Europe, USA, everyone.

  4. Folks put your lifejackets on theres an iceberg on the horizon.To the lifeboats women, children and precious metal holders first

  5. there is only one true life boat but i bet they would not let this post in if i named him all others including precious metals {which is good} are temporary.

  6. Then I'll name Him - King of Kings and Lord of Lords!

  7. Well I really wish that the big collapse would happen and get it over with. All this paper money and crap is really too much anyways. Lets just forget about all this banker talk and Wall Street nonsense. Let is all go we dont need any of it.