In his ubiquitous no-holds-barred manner, former OIMB budget director David Stockman unleashed his own brand of fact-based reality on an unsuspecting CNBC audience late last week.
“You’ve got a train wreck on trade. You’ve got a train wreck on deficits hitting,” he said.
As the US equity market nears its longest-bull-market in history, Stockman is warning investors a crash is inevitable.
“This economy isn’t strong, and it can’t take the punishment that’s coming out of an unhinged White House and a Washington policy environment where they all have their heads in the sand,” Stockman said Thursday on CNBC’s “Futures Now.”
According to Stockman, the China trade war is the primary catalyst that could finally push stocks over the edge.
“We’re not going to have a happy solution to this. We’re in a trade war big time. It’s going to keep getting worse because Donald Trump is unhinged. He is an economic ignoramus on trade,” Stockman added.
“This is not caused by bad trade deals. Our big trade deficits are the result of bad monetary policy for decades. We priced [ourselves] out of the world market, and what he’s trying to do is going to cause a train wreck.”
While Stockman doesn’t ruling out another all-time high in what he’s been calling the “biggest stock market bubble in recorded history,” he warns a 40% shock could “easily” wipe out gains in the days that follow.