Painting a doomsday picture of the economy, stock market, and the world monetary system, former Reagan administration budget director David Stockman told Newsmax TV the world is in a "terrible race to the bottom."
"The fed touched off a race to the bottom when it started this whole process in August 2007 – you know, 12 years ago," Stockman told Monday's "Newsmax Now" of reducing interest rates in ostensible currency manipulation.
"The point is everybody is doing it around the world. This is a terrible race to the bottom to destroy the world's monetary system."
Stockman told host John Bachman that President Donald Trump's latest accusations Monday of China as a currency manipulator is "the pot calling the kettle black."
"Every central bank in the world has been driving interest rates lower, expanding their balance sheets and money supplies at incredible rates," Stockman said.
"You're asking for a major crack-up collision. And I think [Monday] was just kind of a foretaste of things to come."
Stockman, author of "Peak Trump: The Undrainable Swamp and the Fantasy of MAGA," advises investors to go into "capital preservation" mode, pulling their money out of stocks and bonds.
"How do I get out out of the market – that is stocks and bonds – as fast as I can?" Stockman advised investors to ask their brokers. "This is the time for capital preservation. The chickens are coming home to roost. Central banks of the world are lost."
Stockman's dovish prediction further warns the Federal Reserve has exhausted its "dry powder" in managing a recession by reducing interest rates from 5% before the 2008 recession to almost 2%.
"The Fed doesn't have any dry powder left," he said, concluding, "They're going to really ignite a political revolution that would make the Trump movement of 2016 look like a walk in the park."
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