The CPI for the United States is already running at an annualized rate of roughly 5.1% so far this year. Stay tuned for the May 7th Unemployment Number to see if it confirms what was released earlier this month. That, I think will be the key for Greenspan heading into the June FOMC meeting.
What mistakes? Should he apologize for providing liquidity after the 1987 crash, the 1994 "Orange County" collapse, LTCM, the Russian crisis, and 9/11? WTF. Or are you one of those guys who thinks JNPR would still be a $200 stock if the easing had begun in 2000. NOTHING was going to keep Tech from imploding. Greenspan has done a Herculean job under four Presidents, each of whom had unique fiscal views. The monetary side of the equation has been stellar.
Greenspan is fueling the housing bubble in the US. He will later get in trouble when the whole thing finally unravels. USA CPI uses rent prices.. where over 2/3 of americans own their houses. I would love to see CPI adjusted for house prices.. lol What a joke. --MIKE
Greenspan did nothing more than screw over the American future. He encouraged Americans to go into massive debt... making rates ultra attractive. Pumped trillions of dollars into money supply.. and inflate the entire economy. Unimaginable gov/corp/credit card debt coupled with a less than %2 personal savings on avg. Wow we have a sound economy.. let me tell u. The future looks awefull. These are his final years the man is old.. and its funny how he managed to bring rates down to %1 before he leaves. All he really did was make money real cheap.. and make this entire recovery debt driven.. which the future children will have to pay for. The truth is that someone has to be responsible for all of this debt... and he ultimately drove our interest rates to mean nothing. To me that is a capitulation of the fed reserve. Lets assume the recovery doesnt go well and stalls... what are they gonna do next.. whats tricks do they have left. After every single crisis all they do is inflate the economy.. this time they will not have any more tricks up their sleaves because we will have rampant inflation... or to be more specific stagflation. --MIKE
No he is not. Trend Fader is absolutely correct. Dear old Al thinks that cheap money is the answer to everything. It is one thing to provide liquidity and easier borrowing during needed times and it is another to constantly pump cheap money everytime the economy wants to take a breather. What is the point of this housing bubble? Another record number of bankruptcies and repos when it bursts? The only thing this country really needs right now is jobs so that people can pay their bills and start saving. Not easy credit, refinancings and debt based consumption.
Mike: If you're saying that liquidity is the gasoline that fuels boom's that turn into bust's, I"ll agree. However blaming an accommodative Fed policy for the lack of discipline by borrowers is like blaming gun manufacturers for Columbine. Besides it's not like your average 18% per annum credit card junkie is borrowing at the discount rate anyway. Further to blame Greenspan for obscene debt levels is ridiculous. The quest for leverage is age old. It's legislators and voters who are risking solvency so that we can enjoy programs that taxpayers really don't want to pay for. All the Fed does is lower overnight rates in times of crisis and economic peril and then raise rates when demand for credit causes expansion to put upward pressure on wages and prices. I agree this is stagflation. I predicted it coming on this board TWO YEARS AGO. Stagflation is systematic of fiscal policy, cycles of supply and demand, but rarely monetary policy. OPEC doesn't care what the funds rate is pegged at. Thus we live in a time when wages are stagnant but consumer staples like energy, food, and insurance are soaring in price. There is nothing that Greenspan or any other Fed Chairman can do that will easily alleviate that problem.
There is a fundemental problem right now with outsourcing.. the sad thing is that that Bush nor Greenspan want to admit it and even more important adresss it. We need to be become a protectionist state in regards to jobs.. because it eventually will severely hurt us. You can spin this problem any way u like.. but the truth is.. labor in companies in banking and high tech are flooding out of the US.. and that is our bread and butter. That is what built us throughout the 90's. --MIKE