Greenspan

http://www.siliconinvestor.com/readmsg.aspx?msgid=20782713

November 19^th, 2004

I got his messages, loud and clear, that

· Gold keeps Central Bankers honest back in 1960s
· There was irrational exuberance in 1996
· Productivity gains justified share prices higher than irrational exuberance, especially after Greensputin read what Henry and Mary wrote
· There should have been a Y2K crisis
· We may not know a bubble until it blows up
· Information technology ought to have prevented a recession
· Tax decrease would be no problem for the deficit
· It is better to fix the aftermath of a bubble than to prevent a bubble
· There is nothing to worry about regarding household debt
· There is no housing bubble
· Deficits are dangerous
· But there is nothing to worry about :0)

Strangely, I have more respect for Martha the Jailbird than I do for Al the Maestro. The man is an intellectual prostitute, and gives a bad name to prostitution.

Chugs, J

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=19650817

January 3^rd, 2003

Hello AC Flyer Mike, <<You're a stand-up guy, no doubt about that>>

Thank you:0)

Now, to continue our discussion http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=16230052 about Greensputin, I say:

When there is no repentance, there can be no redemption.

Greensputin admits to seeing a bubble
… but says he didn’t see the bubble

… knew how to prick a bubble

… but says he didn’t know how to prick a bubble that he was not sure he saw

… now claims credit for having, so far, staved off a worse bubble-burst by having reflated multiple bubbles, and admits to having chose to do nothing about the earlier bubble that he knew how to prick

… still stands by his much earlier assessment of what economic freedom is, implicitly acknowledging that we do not now have economic freedom as defined by Greensputin

… Oh, yes, as in oops, Greensputin now says something calming about housing ;0)

… and so we will get to learn firsthand what we should have learned from dusty books and musty archives http://www.goldismoney.info/forums/showthread.php?t=4211&got...

… and

Greensputin admits to seeing a bubble:
http://money.cnn.com/2002/09/18/news/economy/greenspan_story/
<<But the Financial Markets Center (FMC), a private research firm in Philomont, Va., reviewed transcripts http://www.federalreserve.gov/fomc/transcripts/transcripts_1996.htm of prior Fed policy meetings and found that Greenspan and other policy makers had identified an equity bubble as early as Sept. 24, 1996.

"While it is not so large as to exert undue pressure on the real side of the U.S. economy, this emerging bubble is nonetheless real," said Lawrence Lindsey, then a Fed governor and currently a key economic adviser to President Bush, according to minutes of the meeting.

"As in the United States in the late 1920s and Japan in the late 1980s, the case for a central bank ultimately to burst that bubble becomes overwhelming," Lindsey added.

"I recognize that there is a stock market bubble problem at this point," Greenspan replied, "and I agree with Governor Lindsey that this is a problem that we should keep an eye on."

Shortly after that meeting, on Dec. 5, 1996, Greenspan made the famous speech http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm in which he wondered, "[H]ow do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?">>

… but said he didn’t see the bubble:
<<"It was very difficult to definitively identify a bubble until after the fact -- that is, when its bursting confirmed its existence," Greenspan said.>>

… knew how to prick a bubble:
http://money.cnn.com/2002/09/18/news/economy/greenspan_story/
<<In several speeches in recent years, Greenspan has dismissed the effectiveness of raising margin requirements.

"There is no evidence to suggest margin requirements have an effect on stock prices," he said in response to a question at a Jan. 13, 2000, speech.
In his August speech about economic volatility, Greenspan amended that idea, saying raising margin requirements might impact stock prices, but only if traders believed the higher margin requirements would be followed by a rise in short-term interest rates.

In 1996, however, Greenspan seemed to have a totally different view of the impact of higher margin requirements.

"We do have the possibility of raising major concerns by raising margin requirements," he said in the Sept. 24, 1996 meeting. "I guarantee you that if you want to get rid of the bubble, whatever it is, that will do it. My concern is that I am not sure what else it will do.">>

… but says he didn’t know how to prick a bubble that he was not sure he saw:
http://www.federalreserve.gov/boarddocs/speeches/2002/20020830/
<<The struggle to understand developments in the economy and financial markets since the mid-1990s has been particularly challenging for monetary policymakers. We were confronted with forces that none of us had personally experienced. Aside from the then recent experience of Japan, only history books and musty archives gave us clues to the appropriate stance for policy. We at the Federal Reserve considered a number of issues related to asset bubbles--that is, surges in prices of assets to unsustainable levels. As events evolved, we recognized that, despite our suspicions, it was very difficult to definitively identify a bubble until after the fact--that is, when its bursting confirmed its existence.

Moreover, it was far from obvious that bubbles, even if identified early, could be preempted short of the central bank inducing a substantial contraction in economic activity--the very outcome we would be seeking to avoid.>>

… now claims credit for having, so far, staved off a worse bubble-burst by having reflated multiple bubbles, and admits to having chose to do nothing about the earlier bubble:
http://story.news.yahoo.com/news?tmpl=story&cid=580&e=1&u=/n...

<<“SAN DIEGO (Reuters) - U.S. Federal Reserve Chairman Alan Greenspan said on Saturday that policymakers have been proven correct in their decision not to try to prick a 1990s stock-market bubble that subsequently broke on its own.

"There appears to be enough evidence, at least tentatively, to conclude that our strategy of addressing the bubble's consequences rather than the bubble itself has been successful," Greenspan told the annual meeting of the American Economic Association in San Diego, Calif. “>>

… but still stands by his much earlier assessment of what economic freedom is, implicitly acknowledging that we do not now have economic freedom as defined by Greensputin.:
http://www.theaureport.com/cs/user/print/htdocs/4?x-layout=20
<<Don Luskin, in Capitalist Magazine, reports that Congressman Ron Paul told him, “. . . “Gold and Economic Freedom,” [was] a powerful plea for the gold standard published by radical capitalist Ayn Rand, then a close friend of Greenspan's. “I have an original copy and Greenspan signed it for me. I asked him if he still believes it, and he said he ‘wouldn't change a single word.’>>. . .”>>

… Oh, yes, as in oops, Greensputin now says something calming about housing ;0)

http://housing-bubble.com/news/greenspan-housing-bubble-110203.html
<<There was a good deal of concern about this housing bubble, but our evaluation of the data and outlook suggests that while obviously there are potential problems, they're not serious ones that need to be addressed in any material way, as far as we can judge">>

Chugs, J