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GREENSPAN GREENSPAN GREENSPAN who do you think put the US on a "low low low rates" regime? who do you think CREATED THE DOTCOM BUBBLE and the HOUSING BUBBLE?

GREENSPAN GREENSPAN GREENSPAN who do you think put the US on a "low low low rates" regime? who do you think CREATED THE DOTCOM BUBBLE and the HOUSING BUBBLE? not CEOs, GREENSPAN and bernanke is just playing the hand he was dealt the problem isn't CEOs who are out of control, it is central bankers who blow bubbles without consequence. the Fed has power these CEOs can't even fantasize about go ask any of the serious financial journalists at thestreet, marketwatch, wsj, nytimes....without hesitation they will all tell you that low rates set by the Fed created this mess.

rms 18y ago
I swear I remember Alan Greenspan being quoted as saying that he know the low rates would create a housing bubble, I haven't been able to find it though so it may just exist in my memory. Any idea? Also there's absolutely no need to shout here.
- quasimojo 18y ago
  well what he is also famous for is the prediction years ago (when he was hanging out with the objectivist pseudo-intellectuals) that a kondratieff winter (bad downside in the economy) could be nullified by very low rates. he did his best to prove it greenspan adored low rates. he set the too low and then was too late in raising them. poor ben bernanke...given a corpse and told to make it ready to run a marathon. not much choice for ben but to lower rates again. once again, he was too late in raising them. its all in the Feds rate-setting power folks. THEY are the ones who dictate the level of risk in the economy. why do you think so many people call for the abolishment of the Fed? trivia: did the US economy grow faster and with more stability pre-fed (pre 1913) or post-fed?
  - nostrademons 18y ago
    > did the US economy grow faster and with more stability pre-fed (pre 1913) or post-fed? Not really a fair comparison - the U.S. economy was smaller pre-fed, and so it was much easier for it to grow at a higher percentage rate. That's like saying that China is growing 3x faster than the U.S, and so a pseudo-communist authoritarian government with all ownership of land is better than a free-market democracy. ;-) Trivia: Who performed the role of the Fed before there was a Fed? Just because you get rid of it doesn't mean it won't exist. ;-)
    - quasimojo 18y ago
      Not really a fair comparison - the U.S. economy was smaller pre-fed its totally valid. the economy has only shrunk temporarily on a small number of occasions. the economy is more or less always growing, so it is always smaller in the past. indeed the US suffered a bad depression in the 1870s but pulled through without the Fed Trivia: Who performed the role of the Fed before there was a Fed? there wasn't one source. remember bank and state notes? in any case, prior to the fed, a dollar held its value for decades. post fed, the dollar lost 99% of its value
      - nostrademons 18y ago
        > its totally valid That wasn't my point. It's easier for small economy to grow at a higher rate. If a $50B economy grows by $50B, that's a 100% growth rate. If a $10T economy grows by $50B, that's a 0.5% growth rate. For the $10T economy to grow by 100%, it would need $10T of additional goods and services, which is a significantly harder accomplishment than growing by $50B. The answer to my trivia question, BTW, is J.P. Morgan. The Fed was created as a reaction to the panic of 1907, when Morgan went over the books of each failing bank and said "Nope, let it fail" or "Okay, the trouble stops here. Let's give them cash" depending on whether they were solvent. Much like Bernanke & Paulson have had to do with Bear Stearns and Lehman Brothers. Congress felt that this was too much power to concentrate in the hands of a private individual, and so they created the Fed as a quasi-government organization responsible to Congress. Inflation is not unique to the Fed system, either. Remember "not worth a Continental", or the erstwhile Confederate dollar? The 1870-1910 era featured deflation because it coincided with the industrial revolution and a huge flood of cheap new goods onto the market, not because of the absence of the Fed. The 1929-1932 era also featured deflation, yet had an activist Fed that interfered far more than the current one.
        quasimojo 18y ago
        That wasn't my point. It's easier for small economy to grow at a higher rate. i know and i basically agree...my point is that the Fed has not demonstrably proven to grow the economy, manage the currency, or control inflation better than other forces. while we have not lost our currency like the old bank notes, the dollar has lost 99% of its value. relative to pre-1913, the dollar is indeed worthless The answer to my trivia question, BTW, is J.P. Morgan he bankrolled the government for, what,. thirteen days, he did not print currency. indeed that event goes back to your "small numbers" arg. he could bankroll the govt because it was small. bill gates could not fund our govt for thirteen days today.

rms 18y ago

I swear I remember Alan Greenspan being quoted as saying that he know the low rates would create a housing bubble, I haven't been able to find it though so it may just exist in my memory. Any idea? Also there's absolutely no need to shout here.

quasimojo 18y ago
well what he is also famous for is the prediction years ago (when he was hanging out with the objectivist pseudo-intellectuals) that a kondratieff winter (bad downside in the economy) could be nullified by very low rates. he did his best to prove it greenspan adored low rates. he set the too low and then was too late in raising them. poor ben bernanke...given a corpse and told to make it ready to run a marathon. not much choice for ben but to lower rates again. once again, he was too late in raising them. its all in the Feds rate-setting power folks. THEY are the ones who dictate the level of risk in the economy. why do you think so many people call for the abolishment of the Fed? trivia: did the US economy grow faster and with more stability pre-fed (pre 1913) or post-fed?
- nostrademons 18y ago
  > did the US economy grow faster and with more stability pre-fed (pre 1913) or post-fed? Not really a fair comparison - the U.S. economy was smaller pre-fed, and so it was much easier for it to grow at a higher percentage rate. That's like saying that China is growing 3x faster than the U.S, and so a pseudo-communist authoritarian government with all ownership of land is better than a free-market democracy. ;-) Trivia: Who performed the role of the Fed before there was a Fed? Just because you get rid of it doesn't mean it won't exist. ;-)
  - quasimojo 18y ago
    Not really a fair comparison - the U.S. economy was smaller pre-fed its totally valid. the economy has only shrunk temporarily on a small number of occasions. the economy is more or less always growing, so it is always smaller in the past. indeed the US suffered a bad depression in the 1870s but pulled through without the Fed Trivia: Who performed the role of the Fed before there was a Fed? there wasn't one source. remember bank and state notes? in any case, prior to the fed, a dollar held its value for decades. post fed, the dollar lost 99% of its value
    - nostrademons 18y ago
      > its totally valid That wasn't my point. It's easier for small economy to grow at a higher rate. If a $50B economy grows by $50B, that's a 100% growth rate. If a $10T economy grows by $50B, that's a 0.5% growth rate. For the $10T economy to grow by 100%, it would need $10T of additional goods and services, which is a significantly harder accomplishment than growing by $50B. The answer to my trivia question, BTW, is J.P. Morgan. The Fed was created as a reaction to the panic of 1907, when Morgan went over the books of each failing bank and said "Nope, let it fail" or "Okay, the trouble stops here. Let's give them cash" depending on whether they were solvent. Much like Bernanke & Paulson have had to do with Bear Stearns and Lehman Brothers. Congress felt that this was too much power to concentrate in the hands of a private individual, and so they created the Fed as a quasi-government organization responsible to Congress. Inflation is not unique to the Fed system, either. Remember "not worth a Continental", or the erstwhile Confederate dollar? The 1870-1910 era featured deflation because it coincided with the industrial revolution and a huge flood of cheap new goods onto the market, not because of the absence of the Fed. The 1929-1932 era also featured deflation, yet had an activist Fed that interfered far more than the current one.
      - quasimojo 18y ago
        That wasn't my point. It's easier for small economy to grow at a higher rate. i know and i basically agree...my point is that the Fed has not demonstrably proven to grow the economy, manage the currency, or control inflation better than other forces. while we have not lost our currency like the old bank notes, the dollar has lost 99% of its value. relative to pre-1913, the dollar is indeed worthless The answer to my trivia question, BTW, is J.P. Morgan he bankrolled the government for, what,. thirteen days, he did not print currency. indeed that event goes back to your "small numbers" arg. he could bankroll the govt because it was small. bill gates could not fund our govt for thirteen days today.