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Audience Reaction To Greenspan's CFR Speech: "That Was Scary As Shit..."

Alan Greenspan Looks Like A Monkey

Alan Greenpsan destroys the dollar

Alan Greenspan Ben Bernanke cartoon

Keynesian Alan Greenspan Gets Religion, Issues Warning To Obama & Congress: "The Stimulus Failed!  Stop Spending!"

Another Keynesian has come around from the dark side.  How long until Krugman, Delong, & Romer admit the multi-trillion dollar error of their ways.  Never.  They are political economists, trolls really, and they are focused on extending the power of the Federal government and winning elections for Democrats. 

Now onto Sir Alan's conversion.  Extremely enlightening speech from Greenspan yesterday sponsored by the Council on Foreign Relations (CFR).  Greenspan says watch gold prices, stop the futile attempts at stimulus, let the Bush tax cuts expire, and slash government spending quickly and aggressively.  Check out some of the quotes below.


The former head of the Federal Reserve said fiscal stimulus efforts have fallen far short of expectations, and the government now needs to get out of the way and allow businesses and markets to power the recovery.

“We have to find a way to simmer down the extent of activism that is going on” with government stimulus spending “and allow the economy to heal itself," former Fed Chairman Alan Greenspan told a gathering held at the Council on Foreign Relations in New York on Wednesday.

At this point, “we’d probably be better off doing less than more” because “you’d be far better off to allow the normal market forces to operate here,” Greenspan said.  That’s largely because stimulus spending is not proving as effective as many had hoped. “To the extent the evidence suggests very large deficits concurrently crowd out capital investment, there is a debit to the stimulus program that is somewhere between a third and a half of what the gross stimulus is,” he said.

Greenspan was Fed chairman from 1987 to 2006, and was succeeded by current central bank chief Ben Bernanke. Greenspan’s tenure at the Fed was defined by his opposition to government regulation and his confidence that markets would discipline themselves.

To many, the financial crisis was largely born of that ideology, and to some degree, Greenspan has himself said he overestimated the market’s willingness to understand and price for risk. Greenspan has also been widely accused of running an overly easy monetary policy during the early years of the last decade, in turn providing the fuel that powered the housing bubble, the rupturing of which drove the worst recession in generations.

Greenspan’s comments came in response to moderator and audience questions, and were accordingly wide-ranging. The former central banker noted that gold, the price of which has been surging, still represents the “ultimate means of payment.”  What is happening in that market “is a signal there is a problem with respect to currency markets.”  He reckons the problem is not a large one, but the jump in gold prices could be “the canary in the coal mine to keep an eye on.”

Greenspan, while worried about the outlook and what is happening with the housing market, said when it comes to a double-dip recession, “the probability of that is going down.” Given all the ground the economy has lost, “the tinder for a double-dip is not readily available,” although he added if housing goes down “all bets are off.”

Greenspan said that the U.S. needs to do something now to deal with budget deficits and it must do something very soon.  He explained his anxiety is so high that “I’m coming out in the first time in my memory” in support of higher taxes in addition to reduced spending, including allowing the so-called Bush tax cuts to expire.

Our choice is not between good and bad; it’s between terrible and worse,” Greenspan said. The nation has “a level of commitment … which I don’t think we can psychically meet,” absent huge changes in how the government finances itself.



Much more on Greenpsan's speech:



Greenspan is not alone.  On Tuesday, Intel CEO Paul Otellini called for an end to the Obama stimulus:


Last month Greeenspan said the following:



And finally:





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Reader Comments (13)

A Victory For Sanity & Reason (And Your Kids), A Big Fat Loss For Keynes & Krugman »

Sep 16, 2010 at 2:49 PM | Registered CommenterDailyBail
Paul Krugman: Huckster, Liar & Debt Apologist: "We Have 5 Or 6 Trillion To Play With Here" »

Sep 16, 2010 at 2:49 PM | Registered CommenterDailyBail
And You Thought Bernanke Was Bad: Brad Delong Fantasizes About Replacing Him With A $6 Trillion Quantitative Easer

Sep 16, 2010 at 2:50 PM | Registered CommenterDailyBail
This may depend on how much one expected the Porkulus package to actually work. Many of us scoffed at the Keynesian notion that government spending had a 50% multiplier effect on long-term economic growth, so the stimulus bill demanded and received by Barack Obama actually performed to expectations — an expectation of failure. Alan Greenspan undoubtedly meant that Porkulus “worked far less” than the Obama administration expected in remarks today to the Council of Foreign Relations:

Sep 16, 2010 at 2:53 PM | Registered CommenterDailyBail
Greenspan Should Have Seen Housing Crisis, Burry Says

September 09, 2010

Sep 16, 2010 at 2:54 PM | Registered CommenterDailyBail
Michael Boskin: Stimulus 'mostly a tragic waste of money'


Excellent read...
Sep 16, 2010 at 3:03 PM | Registered CommenterDailyBail
I personally find the comparison between Alan Greenspan and the Rhesus Monkey to be completely offensive and in bad taste.

The Rhesus Monkey
Sep 17, 2010 at 2:56 AM | Unregistered CommenterRecoverylessRecovery
Moderation is the key.
Sep 17, 2010 at 9:25 AM | Unregistered CommenterWil Martindale
rlr...nice one...
Sep 19, 2010 at 7:50 AM | Registered CommenterDailyBail
This is indeed scary.....the economy can't heal itself ....LOL

but anything someone like greenspan says at a cfr meeting may carry the weight of the very influential class whom he represents and their ideas going forward.

this is a prescription for a deflationary depression.....remember there is no EZ way out......yes the public sector is crowding out the private sector....but private sector debt is still very high as a % of gdp......gov't spending on more productive measures will slow or stop a deflationary crash like the fed (as "mostly acting in the interest of the financial sector" has done the former)....this will continue to more like kick the can down the road till they can no longer monetize and thus keep interest rates low (or stealthly monetize thru commerical banks) which can go on longer than people think....this is not a great solution but it is less painful.....what greenspan calls for will thrust us into a more global depression and pave the way for a new monetary system a new global socio-economic system (potentially) and at the head will be global bankers....multi-national corportate BOD's....and it will likely be somesort of a 21'st century version of a feudalistic/claste system. Perhaps this is what that have in mind for sustainability.
Sep 20, 2010 at 4:21 PM | Unregistered CommenterChristian pickett
this is not a great solution but it is less painful.....what greenspan calls for will thrust us into a more global depression and pave the way for a new monetary system a new global socio-economic system (potentially) and at the head will be global bankers....multi-national corportate BOD's....and it will likely be somesort of a 21'st century version of a feudalistic/claste system. Perhaps this is what that have in mind for sustainability.


Chrisitian...i'm a supporter of austerity and i don't believe it will create the chaos you think...but i can tell you know these issues pretty well...thanks for commenting and join us more often...
Sep 20, 2010 at 9:12 PM | Registered CommenterDailyBail
I think many people miss one very important thing, what we are experiencing here and now was no accident and Greenspan was complicit in the greatest transfer of wealth in history, from us on Main Street to his buddies on Wall Street. Now that they have filled their pockets w/ our money they want to take away the punch bowl so that no one else can enjoy the party. Hence, they stand alone on top and rule over us as they please. Yes, fiat money will surely lead us down the road to sefdom but taking the punch bowl away now will cause a deflationary collapse from which they will buy up the world ( with our money) and insure that they are the masters and we are the serfs.. It's not an accident, it's the plan.
Sep 24, 2010 at 1:03 PM | Unregistered CommenterD. Hannon

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