By Rana Foroohar
April 7, 2016

If Herman Melville were writing his famous last novel, The Confidence-Man, today, there’s little doubt who his model for the titular rapscallion would be: Donald Trump. One of the great powers of the confidence man is his ability to embed nuggets of truth in a welter of lies. His victims have no idea where factuality ends and fiction begins. That’s the power of the con.

I fear that is what’s now happening to the portion of the American public drawn to Trump’s populist campaign. Take, for instance, his interview with the Washington Post, published April 2. It was rich with fiction, most notably Trump’s promise to eliminate the $19 trillion federal debt in eight years. Pundits and policy experts alike rightly pointed out that this is pure fantasy. But there were a few nuggets of truth buried in the interview: Trump claimed that we are sitting on a “big bubble” in the market fueled by “cheap money” that could cause a “massive recession” when it bursts. Sanded of their Trumpian embellishments, these statements are fact.

Corporate debt and leverage are at record levels, something the Treasury Department’s Office of Financial Research has been concerned about for a year now. One key reason is that central bankers were forced to pump $4.5 trillion into the economy and keep interest rates at record lows (that’s the “cheap money” part) because of congressional gridlock that resulted in a lack of adequate fiscal stimulus. Trump’s predictions of recession in the next few years aren’t outrageous. They’re statistical. Global recessions happen about once every eight years, which puts the world right on track for another. And a global recession could, under certain circumstances, pull the U.S. economy down as well. Some reasonable people now see a 25% to 30% chance of a recession in America by 2017. Trump may be right about where the U.S. could be headed–but dissembles on why we’re headed there.

One has to wonder about the level of grift in Trump’s vows to protect Main Street too. He has, after all, been a consummate creature of Wall Street for decades. Trump made his money the Wall Street way–with little equity down, lots of leverage and a heads-I-win, tails-you-lose modus operandi. According to one veteran Atlantic City gaming expert who asked not to be named for fear of retaliation, Trump was able to borrow from investors at huge debt-to-equity multiples for his casino projects because their projected returns were bolstered by bad operational assumptions. One was that labor costs could be dramatically cut via “innovations” like Mr. Change machines that would dole out coins to slot players in lieu of floor workers. Trouble is, slot players don’t trust change machines. This innovation was a dismal failure, and so was the Taj Mahal.

Not that it mattered much to Trump. Unlike many highly leveraged owners who lose everything when their properties go bankrupt, he was able to restructure his company’s debt in relatively favorable ways each time his deals went bad. According to Edward Weisfelner, a partner at the law firm Brown Rudnick, which represented investor Carl Icahn in his effort to gain control of Trump Entertainment Resorts in the wake of Chapter 11 proceedings in 2009, this was in part because Trump was adept at getting creditors to pay him to use his name, even as properties were going under.

Why would anyone want to keep using the name of a man whose business was bankrupted? Partly because it was so incredibly expensive to scrub the Trump name off. “He would put his name on every possible thing in a casino that he could think of–the chips, the glassware, the carpets, the curtains,” says Weisfelner. “This is clearly a guy who had an interest in seeing his moniker everywhere for ego reasons. But he may also have been thinking more strategically: How much might this help me if things go badly?”

Trump knows so much about the gap between the 1% and the 99% because he’s one of the guys who helped widen it. He’s not a businessman who’ll bring back U.S. jobs but a branding expert adept at making money mainly for himself. Still, his ability to spin a fable that resonates with the day-to-day experience of Main Street, where the “recovery” has never really felt like one, and then use it to sell his own fabulist prescriptions is what makes Trump so effective. At the end of Melville’s tome, readers are left to decide how much is truth, how much is fiction and in whom it is safe to place their confidence. This fall, American voters may find themselves in the very same position.

Contact us at editors@time.com.

This appears in the April 18, 2016 issue of TIME.

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