3 votes

Stockman Warns of Crash Of Fed-Fueled Bubble Economy

The U.S. economy, fueled by “phony money” from the Federal Reserve’s quantitative easing policies, is headed for an inevitable crash, likely “within a few years,” warned David Stockman, who was budget director for President Ronald Reagan.

In an essay published today in the New York Times (NYT), Stockman wrote that Fed policies in the aftermath of the financial crisis have flooded stock markets with cash even while the “Main Street economy” remains weak. The combination, he wrote, has caused an “unsustainable bubble.”