David Stockman Exposes The "$20 Trillion Elephant In The Room"

That US stocks returned to record highs last month - picking up steam even as the world teetered on the bring of another debt crisis - has prompted even the most tenacious bears to recalibrate their forecasts, an effort, we think, to appease investors and clients who are luxuriating in the seemingly unstoppable gains of what is now the longest bull market in US history.

But while the wash of record returns (on paper, at least) has helped assuage the nagging doubts of many a "rational" investor, others are clinging ever-tighter to a pragmatic - if uncomfortable - realism. And one of the most strident voices among this group has been David Stockman, formerly the director of the OMB under Ronald Reagan and now the author of Stockman'sContra Corner.

In a recent interview with Sprott Media in Vancouver, Stockman reiterated that he remains a skeptic, particularly in an era where central banks (thanks to their $20-trillion-plus aggregate balance sheet) have destroyed price discovery and contributed to the blowing of a debt bubble that - when it finally pops - will make the aftermath of the financial crisis appear tame by comparison.

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