Alan Greenspan is a smart, sexy man worth listening to

Alan Greenspan is a smart man, and smart men are sexy. I recently listened to a speech he gave and think it was filled with insight that can benefit everyone. Here's what he had to say:

Alan Greenspan is a smart man, and smart men are sexy.  I recently listened to a speech he gave and think it was filled with insight that can benefit everyone.  You can watch the speech yourself online.  Here are some nuggests of wisdom I pulled from the speech:

  • The credit crisis is working its way through and the end will come without a huge catastrophe.  The worst isn't necessarily over but the sky isn't falling either.
  • High housing prices are the biggest threat to the economy.
  • There is a 42.35% change of a US recession.
  • The stock market is going up because it feels the worsdt of the credit crunch is over and international growth is strong.
  • Moral Hazard arguments are bogus.  There is no way to help the economy without also helping speculators.  You don't want to cut off your nose to spite your face.
  • He believes we are at a turning point with inflationary pressure, which he thinks will begin to build over the next couple of decades.
  • The base rate of inflation may need to be reexamined.  Food, energy, etc. may need to be calculated differently into inflation calculations.
  • Tweaking money supply doesn't work because of globalization.
  • Central banks have lost control of maturities greater than 4 years.
  • The trade off between inflation and unemployment is turning.  In order to maintain low inflation may see an increase in unemployment.
  • Increases in productivity are slowing.  Companies dispending cash to shareholders at almost record levels because don't have good investments.
  • The credit crunch is not analogous to the S&L crisis.  S&L crisis paralyzed banks much worse than today.
  • Derivatives overall are doing their job spreading risk.  There has not been a major bank failure in a long time.
  • No real problem is China decides to sell their $1.4 trillion dollar reserves.  In March 2004 Japan suddently stopped buying dollars and nothing happened.  They were a major buyer at the time.  The currency markets are so big (100 trillion) that it takes much more than what China has to really move the dial

As you can see, this wide-ranging speech covered many of today's hot button topics.  I recommend you give it a listen or at least skim the points.  I welcome any comments. 

 

Your code to embed this article on your website* :

*You are allowed to change only styles on the code of this iframe.

Comments

  • Ruiz

    October 04, 2007

    amen to Mr. Greenspan. The US economy had its best 20 year run under his tenure. let's hope it continues.

  • «
  • Page 1 of 1
  • »
Add your Comment