David Stockman: Biggest Bond Bubble Ever — Buy Gold. Fiscal Bloodbath Coming this Fall

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• David Stockman: Biggest Bond Bubble Ever — Buy Gold. Fiscal Bloodbath Coming this Fall
  by Greg Hunter’s USAWatchdog.com (Early Sunday Release)
  Sky high stock and bond prices have former Reagan Administration White House Budget Director David Stockman worried because we are on our way to a big financial crash. Stockman explains, “Yes, absolutely.  The market is insanely valued right now.  They were trying to tag, the robo machines and day traders, they were trying to tag 2,400 on the S&P 500.  They ended up at 2,399, I think, but the point is that represents about 25 times trailing earnings for 2016.  We are at a point in the so-called recovery that has already lasted 96 months.  It’s almost the longest one in history.  What the market is saying is we have reached the point of full employment forever.  There will never be another recession or any kind of economic surprise or upset or dislocation.  The market is pricing itself for perfection for all of eternity.  This is crazy. . . . I think the market could easily drop to 1,600 or 1,300.  It could drop by 40% or even more once the fantasy ends.  When the government shows its true colors, that it’s headed for a fiscal blood bath when this crazy notion that there is going to be some Trump fiscal stimulus is put to rest once and for all.  I mean it’s not going to happen.  They can’t pass a tax cut that big without a budget resolution that incorporated $10 trillion or $15 trillion in debt over the next decade.  It’s just not going to pass Congress. . . . I think this is the greatest sucker’s rally we have ever seen.”
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  So, when is cold hard reality going to set in? Stockman contends, “There will be no bid for the stock once the panic sets in.  We’re going to an hit and air pocket.  The S&P 500 is going to drop by hundreds and hundreds of points sometime over the next few months as we drift into this unexpected crisis. . . . I would target sometime between August and November because that’s when the rubber is going to meet the road on a debt ceiling increase when they are out of cash.  Washington is going to end up in vicious political conflict over what to do about the debt ceiling. . . . It is going to be one giant fiscal bloodbath the likes of which we have never seen.”
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