Jim Grant recently interviewed former Ronald Reagan Officer of Budget and Management David Stockman on his Grant’s Interest Rate Observer podcast.
Their conclusion? America is broke. And central bank free money broke it.
The public debt was absorbed massively by central banking, led by the United States, by the Greenspan era, creating what I call a disease that eventually enveloped the entire financial system of the world. Every central bank began to imitate what the Fed was doing, or bought dollars in order to prevent their exchange rates from appreciating, all of them being good mercantilists and statists. And before we knew it, the balance sheets of the central banks of the world, which were less than $400 billion at the time that Greenspan took the job, ended up, three decades later, at $22 trillion today. Now that a lot of bond buying.”