The only reason the U.S. economy has not disintegrated because of its stupefying excesses is because Japan, Europe and China are in even worse shape, according to former White House budget chief David Stockman.
Stockman, who made his name working for President Regan, is no fan of the contemporary Federal Reserve or its Wall Street minions. He says the Fed operates a "malignant monetary regime," while Wall Street operates a casino in tandem.
In a column for his Contra Corner blog
, Stockman said he is often asked about the precarious outlook for the American dollar given the nation's debt, but predicts the greenback is not going to disintegrate any time soon.
"The reason is simply that the other three big economies of the world — Japan, China and Europe — are in even more disastrous condition. Worse still, their governments and central banks are actually more clueless than Washington, and are conducting policies that are flat out lunatic — meaning that their faltering economies will be facing even more destructive punishment from policymakers in the days ahead."
Stockman is perhaps even less complimentary in his assessment of the leaders of the other three global economies than he is of Fed chief Janet Yellen.
"[European Central Bank Chief Mario] Draghi, [Bank of Japan Governor Haruhiko] Kuroda and the commissars of red capitalism in Beijing make Janet Yellen and Stanley Fischer (Fed Vice-Chairman) appear to be slightly sober," he noted.
"Japan is a bankrupt old age colony. China is the most monumental credit and construction Ponzi in human history. Europe is a terminal victim of socialist welfare and statist dirigisme," Stockman proclaimed.
"All three are attempting to defer the day of reckoning via resorting to a final spasm of money printing and central bank manipulation that is so desperate and crazy that it can only end in disaster."
Stockman said the Japanese government is "hands-down" the biggest debtor on planet Earth, with a gross public debt now estimated at 240 percent of GDP, and no apparent way out of its quagmire.
But China might be in even worse shape, he suggested, given its seemingly endless spree of construction and fixed-asset investments in everything from phantom cities to unused airports and bridges, even as the government has taken on impossible debts to fuel artificial growth.
"The rate at which the China Ponzi is falling apart is now accelerating," Stockman wrote.
Meanwhile, in his view the European Central Bank is converting the euro to confetti by monetizing $1.2 trillion of European government debt with a U.S.-inspired quantitative easing program. And he said the European state sector is smothering capitalism with levels of taxation that ensure disaster.
"So there is a reason why the dollar is soaring. The other shirts in the laundry are not just dirtier. They are actually disintegrating," said Stockman.
Christine Lagarde, managing director of the International Monetary Fund, might take issue with some of Stockman's conclusions.
She said last week that the world's developed economies see brighter skies ahead because of cheap oil, currency shifts and low interest rates, Agence France-Presse
"For once in a long time there are clearly some relatively better news on the horizon of the advanced economies. And this has not happened in awhile," she stated.
"We clearly have a rebound of the U.S. economy, an improvement and good growth showing in the U.K., and the euro area is also now turning the corner," said Lagarde. She said China is deliberately trying to slow down its economy.
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