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Alan Greenspan

Alan Greenspan’s book The Age of Turbulence is out.  Since he takes Bush to task and remarked that Clinton absorbed economic data like a sponge, he is of course featured on the cover of Newsweek.

Here is an article in Portfolio.com that takes a different view. The author points out that the FED was created to prevent calamity,not put the fire out afterwards.  You might go back and read my previous post about the Panic of 1907 which lead to the creation of the current FED in 1913.

As Jim Rogers observes, the FED Chair is a player but no longer THE Player. Now futures markets and other countries as well as currency levels play a big part in what the FED can realistically do.

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4 responses to “Alan Greenspan”

  1. Jordan McClary Avatar
    Jordan McClary

    Hey Dr. E,
    long time since my last post. But I thought this was a good article. Why is Bush so shocked that Mr. Greenspan would point out the obvious points of his reason for going to Iraq? I mean G-Golly, its not like we went over there to find weapons of mass destruction he he he. Economically there are various facts that clearly point to GW’s motives for going to Iraq. I still can’t believe we haven’t reprimanded GW for sending us to Iraq and then saying whoops sorry we didn’t find anything. I know a CEO at a company would have been fired had they made such a big mistake like that!. Ok so im off track here.
    Is it not funny how people are still responding to the ideas and thoughts of a guy who no longer holds a significant position? Its almost as though Bernanke is just sitting in a chair, holding someone else’s spot. But, who’s really responsible for letting the value of the dollar lose its control? can you really blame just the Federal Reserve? Would it not also be a responsibility of the president, and congress who set the legislature and let various modes of business escape to these foreign countries making them wealthy? I mean this is simplicity and focus of International Finance. As one gains to much strength, their will be a shift to that is cheaper bringing the strength of both back into somewhat of a balance.
    Jordan McClary

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  2. Jordan McClary Avatar
    Jordan McClary

    Hey Dr. E,
    long time since my last post. But I thought this was a good article. Why is Bush so shocked that Mr. Greenspan would point out the obvious points of his reason for going to Iraq? I mean G-Golly, its not like we went over there to find weapons of mass destruction he he he. Economically there are various facts that clearly point to GW’s motives for going to Iraq. I still can’t believe we haven’t reprimanded GW for sending us to Iraq and then saying whoops sorry we didn’t find anything. I know a CEO at a company would have been fired had they made such a big mistake like that!. Ok so im off track here.
    Is it not funny how people are still responding to the ideas and thoughts of a guy who no longer holds a significant position? Its almost as though Bernanke is just sitting in a chair, holding someone else’s spot. But, who’s really responsible for letting the value of the dollar lose its control? can you really blame just the Federal Reserve? Would it not also be a responsibility of the president, and congress who set the legislature and let various modes of business escape to these foreign countries making them wealthy? I mean this is simplicity and focus of International Finance. As one gains to much strength, their will be a shift to that is cheaper bringing the strength of both back into somewhat of a balance.
    Jordan McClary

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  3. Dennis Elam Avatar
    Dennis Elam

    Jordan
    Welcome back, for new readers Jordan was in the MBA accting class this past spring. Bernake is having to use the same tools to correct for Greenspan’s excess. Yes stocks rallied yesterday but so did gold to a 27 year high, oil is fliring with $80 as other commodity prices soar. How long till the markets decide that $740 gold is inflationary? With the dollar dropping, the value of bonds and stocks held in foreign currencies, ie foreign hands, also drops. How long will those investors be willing to hold bonds falling in price in their currency and paying low rates?

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  4. Dennis Elam Avatar
    Dennis Elam

    What govts do speaks louder than what they say. Our Govt is debt financed. The dollar has fallen from 120 to 78 versus teh Euro. When that happens it allows us to repay the debt in cheaper dollars. This shell game can only continue as long as foreigners are willing to buy the debt and take cheaper dollars in return. I noticed last night that ABC news, which is to say mass market, was featuring stories on how wheat has doubled in price, there are protests in Italy over the cost of pasta, etc. Usually when business items like this make mass market headlines, a correction is close at hand. Which is to say that I have been mystified why foreigners have not demanded a higher rate of interest on their bonds, I would expect interest rates to have to rise as the dollar falls but it has not happened yet.

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