Republican presidential frontrunner Donald Trump has joined the permabear club that forecasts an imminent economic collapse in the U.S.
He said in an interview with the Washington Post that U.S. economic conditions are so risky that the world’s largest economy is headed for a “very massive recession” and that “it’s a terrible time right now” to invest in the U.S. stock market.
“I think we’re sitting on an economic bubble. A financial bubble,” the billionaire businessman said in the interview published on Saturday.
“We’re not at five percent unemployment,” Trump said. (Source: “In a revealing interview, Trump predicts a ‘massive recession’ but intends to eliminate the national debt in 8 years,” The Washington Post, April 2, 2016.)
“We’re at a number that’s probably into the twenties if you look at the real number,” he added.
On Friday, the Labor Department shows the unemployment rate rose slightly to five percent because hundreds of thousands of unemployed Americans resumed their search for work.
Government experts don’t count people as officially unemployed unless they have searched for jobs in the past four weeks.
Official data show eight million Americans are still unemployed, while another 6.1 million want full time work but can find only part-time jobs.
Trump said the official jobless figure is “statistically devised to make politicians – and in particular presidents–look good.”
He also blamed unemployment on the outsourcing of U.S. jobs and facilities to countries such as China and Mexico.
The real estate magnate said “it’s a terrible time right now” to invest in the stock market, offering a more bleak view of the U.S. economy than that held by many mainstream economists.
All three major U.S. indexes are near all time highs. The Dow Jones Industrial Average’s (DJIA) price-per-earnings ratio is 20.2, while the S&P 500 index’s P/E ratio is 22.1. The NASDAQ Composite P/E ratio is 24.1
Trump promised in the interview to wipe out the more than $19.0 trillion national debt “over a period of eight years,” helped by a renegotiation of trade deals.
“I’m renegotiating all of our deals, the big trade deals that we’re doing so badly on,” he said.
The federal government’s assets totalled $3.2 trillion as of September 2015, according to the U.S. Government Accountability Office.
The magic number for the Republican presidential race is 1,237 delegates. Trump has so far won 736 delegates, ahead of Ted Cruz’s 463 delegates, and John Kasich’s 143 delegates. Still available are 943 delegates.
Among permabear analysts forecasting an approaching economic collapse in the U.S. are David Stockman, the former director of the Office of Management and Budget; Peter Schiff, head of Euro Pacific Capital; three-time presidential candidate Ron Paul; and Marc Faber, publisher of The Gloom, Boom & Doom Report.