"This is a Giant Ponzi Scheme"

There's a room where the light won't find you
Holding hands while the walls come tumbling down
When they do, I'll be right behind you
--Tears for Fears

Cavuto chats with David Stockman about the state of our current financial system. Stockman has written a new book that is drawing fire from both Left and Right--a sure sign that he is right on track.

We have reflected on Stockman's thoughts on these pages before. His message to Cavuto, who obviously is uncomfortable with what Stockman is saying, is that we've created a gigantic Ponzi scheme built on debt and leverage with little underlying equity.

Central banks reside at the epicenter of the Ponzi which is best expressed currently in the bond market where the Fed is buying $85 billion/month of our own debt with money printed out of thin air.

In his view, a major dislocation awaits us within the next two years. I, of course, wonder if it will not be sooner...

position in SPX, Treasuries