Oct. 30 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said China's stock market is a speculative bubble that he expects will burst.
Asked if China was in a state of ``irrational exuberance,'' a phrase Greenspan made famous in 1996, the former chairman said, ``I think so,'' speaking to a conference of insurance executives in Boston today. ``When you don't expect it, it breaks,'' Greenspan said of the bubble.
His comments reprise remarks from May, when Greenspan said he was concerned Chinese equities might undergo a ``dramatic contraction'' after its main stock index at the time had jumped more than 90 percent since the start of the year.
Greenspan today also predicted a ``long-term erosion'' of the dollar in part because of the U.S. current-account deficit. The U.S. currency's decline is accelerating, Greenspan said. For three years, he has expressed a view that the dollar will weaken when international investors tire of financing the U.S. current- account gap, the broadest measure of trade.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXPIQpTPiIbk&refer=home
Alan, you´re so cool !
Asked if China was in a state of ``irrational exuberance,'' a phrase Greenspan made famous in 1996, the former chairman said, ``I think so,'' speaking to a conference of insurance executives in Boston today. ``When you don't expect it, it breaks,'' Greenspan said of the bubble.
His comments reprise remarks from May, when Greenspan said he was concerned Chinese equities might undergo a ``dramatic contraction'' after its main stock index at the time had jumped more than 90 percent since the start of the year.
Greenspan today also predicted a ``long-term erosion'' of the dollar in part because of the U.S. current-account deficit. The U.S. currency's decline is accelerating, Greenspan said. For three years, he has expressed a view that the dollar will weaken when international investors tire of financing the U.S. current- account gap, the broadest measure of trade.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXPIQpTPiIbk&refer=home
Alan, you´re so cool !
