Best Greenspan Quote Ever written..

Trend Fader · Nov 3, 2005

http://biz.yahoo.com/ap/051103/greenspan.html?.v=25

Lawmakers hailed Greenspan's economic stewardship

"You've done one heck of a job. And I think we're going to miss you a great deal," said Rep. Maurice Hinchey, D-N.Y.

"The nation is in your debt," said the committee's chairman, Rep. Jim Saxton, R-N.J.

Now that is funny.. I am printing out what Saxton said.. and will look back at this in 5 years.

Arnie · Nov 6, 2005

Maybe he was misquoted...."The nation is in debt"

Pabst · Nov 6, 2005

Last I learned, the Chairman of the Federal Reserve Bank is not responsible for fiscal policy. So please enlighten me, what does debt have to do with Greenspan?

Sparohok · Nov 7, 2005

Quote from Pabst:

Last I learned, the Chairman of the Federal Reserve Bank is not responsible for fiscal policy. So please enlighten me, what does debt have to do with Greenspan?

Accomodative monetary policy lowers interest rates, hence encouraging high levels of personal and corporate debt. It is hardly a coincidence that the personal savings rate is at record low levels, even going negative for part of the year.

Martin

Covertibility · Nov 7, 2005

Anyone know of the expansion of corporate debt going on? Everytime I turn on CNBC or Bloomy, there's always this talk about companies sitting on huge amounts of cash and the criticism of not investing in their own infrastructure. One article: Share buybacks soar 51 percent in 2005.

Pabst · Nov 7, 2005

Quote from Sparohok:

Accomodative monetary policy lowers interest rates, hence encouraging high levels of personal and corporate debt. It is hardly a coincidence that the personal savings rate is at record low levels, even going negative for part of the year.

Martin

Yes but the Treasury has been able to borrow at low rates also. Without accomodative monetary policy, Federal budget deficits would have been even higher.

areyoukidding? · Nov 7, 2005

The Maestro will be surely missed by Wall Street and Main Street alike.

TM_Direct · Nov 7, 2005

i think he gets too much credit for when things are good and vice versa...however, I think ultimately he will be responsible for the extreme swings his policies caused,....non stop rate hikes to 'explode the bubble" and then over reactive non stop reductions to cause the housing bubble...he should have practiced what he preached and not reacted so over the top to every economic report.

drsteph · Nov 7, 2005

Quote from Pabst:

Yes but the Treasury has been able to borrow at low rates also. Without accomodative monetary policy, Federal budget deficits would have been even higher.

Blue ribbon buddy -

Are we all sure that central bank debt at low levels is necessarily a good thing? Does it depress the 'risk premium' unecessarily? And in a fiat economy, where you can print enough dollars to cover your debt, why should you be covetous of maintaining a low amount of debt, at least until your foreign trading partners start complaining?

Yes, your argument holds in normal scenarios. But when the debt is held principally by another trading partner in an effort to artificially depress their own FX rate (to keep selling imports to you cheaply), what does it mean?

Not like I have a clue. I'll just have another schlitz.

Sparohok · Nov 7, 2005

Quote from Pabst:

Yes but the Treasury has been able to borrow at low rates also. Without accomodative monetary policy, Federal budget deficits would have been even higher.

What makes you think that? Governments respond to the same incentives that anyone else does. When borrowing is cheap, borrow more.

Martin