Former Director Of National Budget Warns That Markets Will Tank After US Election

Credit – Inquisitr

Former Director of the Office of Management and Budget under Reagan, David Stockman, warns that regardless of who wins the US presidential election, Americans can expect the stock market to drop by as much as 25%. Stockman, who is often credited as the “Father of Reaganomics,” has warned investors to sell everything. Stockman told CNBC that “the markets are hideously inflated” and anyone invested in stocks should sell either before or immediately after election day due to the dangers that both Donald Trump and Hillary Clinton pose as President Elect. According to Stockman, “there could be a 25 percent draw down on markets” because “government is going to be totally paralyzed regardless of who wins.”

He went on to say that “under a Trump victory, all bets are off. I like [Trump] because he’s against the establishment, but he has no economic program. Yes, he’s a disruptor, but has nothing to disrupt with. If elected, it will be partisan warfare and a total disaster.” A warning that a Trump win could derail the already fragile US economy is nothing new. Billionare Mark Cuban, who supports Clinton, has warned that a Trump win would cause stock markets to “tank.” A prominent investment firm, Wedbush Securities, has also argued that a Trump win would cause stocks to tumble by up to 50 %. With most of Wall Street unified behind Trump’s opponent Hillary Clinton, it would be quite easy for the banking industry to cause mass financial destruction if their chosen candidate fails to win this Tuesday.

Stockman, however, has also warned that a Clinton victory would be equally, if not more, disastrous for markets. He, like many others, expect that official investigations and new disclosures from WikiLeaks would be non-stop under a Clinton administration. For this reason and others, Stockman reasons that Congress “will become a killing field” for anything Clinton tries to pass through Congress. He predicts that “for six months, or even longer, there will be acrimony, there will be brinkmanship, there will be paralysis.” This deadlock would prevent the federal government from preventing the economy’s slide into an even deeper recession. In addition, markets would likely be affected by the massive backlash a Clinton win would generate from Trump supporters.

Though Tuesday’s election may serve as the spark that ignites the next economic crisis, these problems have been years in the making, largely because the damage done by the 2008 near-meltdown was never healed. The derivatives market, whose collapse in 2008 caused the worst of the crisis, is now larger than the world’s GDP and many major banks, including Germany’s largest bank, are tumbling to the point of near collapse. Stockman, who also worked for 20 years on Wall Street and even served as a Congressman, says that the IRS’ drop in revenue is the clearest indicator that markets are in grave danger. He explained that, “The IRS said that last year revenue was up 1% and, in the last quarter, it was down 4 percent. […] That means the work hours aren’t happening.” Stockman has previously made the claim that unemployment in the US is actually around 42.9%. He further reasoned that the combination of a paralyzed congress, a soon-to-expire debt ceiling, a central bank fresh out of ammo, and a market that has shown few signs of life for 700 days have made for a perfect storm for the US as well as the global economy.

Stockman ended his series of dire warnings by saying that the future of Wall Street after the election will be like San Francisco’s devastating 1906 earthquake. Stockman’s analysis is spot-on, our economy has been inflated to unprecedented heights due, in part, to the irresponsible monetary policy of privately-owned central banks. Even the Rothschilds have warned that the “greatest monetary policy experiment in history” will end in disaster. If Stockman is right, such a disaster could be literally only days away.

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