Jim Rogers has a really cool site, www.jimrogers.com, that chronicles his worldly travels in his off-road modified Mercedes SLK. Really interesting. He travels to all the arab countries I'd be afraid to go to and all the classic spots in Europe etc. Check it out.
Jim Roger's Article on Greenspan
- Thread starter Reverend Trader
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I really don't feel qualified to condemn the life's work of an accomplished public servant, much less one involved in something as complex and fraught with tension and conflict as the Chairmanship of the Federal Reserve, based on a few out-of-context quotes and the diatribe of a flamboyant self-promoter.
I do note, however, that the opinions held about Mr. Greenspan are merely that, and that they are about as reliable as the weather.
I am sure that I missed the news reports of Mr. Greenspan in the street forcing people at gunpoint to throw their savings on margin at every pipe dream concocted by super salesmen and others who wouldn't dream of a moment's public service except as an alternative to jail time.
(If Mr. Greenspan is as financially omnipotent as Mr. Rogers seems to think, Mr. Rogers owes Mr. Greenspan a debt of thanks for making his lavish lifestyle possible.)
I do note, however, that the opinions held about Mr. Greenspan are merely that, and that they are about as reliable as the weather.
I am sure that I missed the news reports of Mr. Greenspan in the street forcing people at gunpoint to throw their savings on margin at every pipe dream concocted by super salesmen and others who wouldn't dream of a moment's public service except as an alternative to jail time.
(If Mr. Greenspan is as financially omnipotent as Mr. Rogers seems to think, Mr. Rogers owes Mr. Greenspan a debt of thanks for making his lavish lifestyle possible.)
chasinfla,
If Greenie is accomplished in anything, it is in self preservation and public relations. While he has recklessly flushed the economy of the US down the toilet, he has maintained the image of an omnipotent king, more powerful than president, congress and the two put together.
Anyone is 'qualified' to read Greenie's own words (darkhorse's post above) and come to their own conclusion.
If you prefer to remain naive and swallow the public relations tripe with nary a wink, that's up to you. The smart money needs someone to take the other side after all.
If Greenie is accomplished in anything, it is in self preservation and public relations. While he has recklessly flushed the economy of the US down the toilet, he has maintained the image of an omnipotent king, more powerful than president, congress and the two put together.
Anyone is 'qualified' to read Greenie's own words (darkhorse's post above) and come to their own conclusion.
If you prefer to remain naive and swallow the public relations tripe with nary a wink, that's up to you. The smart money needs someone to take the other side after all.
Excerpt from Gene Epstein's article in Barron's [11/9/02]:
"Libertarian Rep. Ron Paul of Texas, who happens to know more economics than most economists, tells the story of an encounter with Alan Greenspan that is filled with irony.
Paul asked the Fed chairman to sign his copy of an essay called "Gold and Economic Freedom," which Greenspan wrote for the July 1966 issue of philosopher Ayn Rand's periodical, "The Objectivist." Beginning with the feisty words, "An almost hysterical antagonism toward the gold standard... unites statists of all persuasions," the article goes on to express antagonism toward the Federal Reserve, which in the author's opinion helps foster credit bubbles via the creation of cheap money. By contrast, argues the 40-year-old enfant terrible, the far more preferable system of "fully free banking...and [a] fully consistent gold standard" would prevent bubbles from occurring.
While Greenspan obligingly signed his name to the radical document, Ron Paul asked, "Would you like to add a disclaimer?"
To which affable Al responded, "No, I reread this article recently -- and I wouldn't change a single word." (Paul recalls that this exchange probably occurred early last year.)"
"Libertarian Rep. Ron Paul of Texas, who happens to know more economics than most economists, tells the story of an encounter with Alan Greenspan that is filled with irony.
Paul asked the Fed chairman to sign his copy of an essay called "Gold and Economic Freedom," which Greenspan wrote for the July 1966 issue of philosopher Ayn Rand's periodical, "The Objectivist." Beginning with the feisty words, "An almost hysterical antagonism toward the gold standard... unites statists of all persuasions," the article goes on to express antagonism toward the Federal Reserve, which in the author's opinion helps foster credit bubbles via the creation of cheap money. By contrast, argues the 40-year-old enfant terrible, the far more preferable system of "fully free banking...and [a] fully consistent gold standard" would prevent bubbles from occurring.
While Greenspan obligingly signed his name to the radical document, Ron Paul asked, "Would you like to add a disclaimer?"
To which affable Al responded, "No, I reread this article recently -- and I wouldn't change a single word." (Paul recalls that this exchange probably occurred early last year.)"
I'd like to make 2 points-
1- Do any of you find it surprising that for a board of traders with 12k supposed members, only a half dozen or so have come to express their opinions on something that is so important to their careers. It once again shows that most people on these boards are amateurs and looking for the next hot fix, and not looking to learn about the economy or their future careers. I would EXPECT that this board would be 40 pages long by now.
2- I had never read Rogers that thoroughly, but I think that Fleck has pegged this all perfectly. I have read him every night, and thoroughly for a while now. He was the ONLY naysayer when greenie was diefied. I deserves the world's praise as just about the only person who was willing to stand up and say the truth. Too bad no one listened. Greenie is in the corner now, and there's no way out. He can't lower rates any more. At some point, banks will just stop lending, their charge off rates will be higher than the spread that they will gain. Did you see that consumer credit rose another 10b last month. We are a nation of borrowers. What happens when we can't borrow any more? I was aghast when greenie lowered rates 50bp. If anything, he should raise rates, let the system flush and we can go on. Sure, we'll have 2-3 years of high unemployment, and recession/depression, but at least we won't be mired in 20 years of Japanism. Their system cannot clear. I'm a young man. I'd prefer to trade even 3-5 years of economic reversals, if it would come with another period of 20 years of economic bliss. Maybe, our chairman then will be smarter and not let bubbles form.
On a final note, over the last week, I was looking through a list of HIGHLY speculative stock picks (trying to find anything investible in the rubble), mainly in optics, communications, and energy. It is absolutely amazing, in almost every stock out of 50, JPM was the largest creditor. I absolutely see no reason that they can stay solvent. Out of these 50 stocks, 45 won't make it. JPM has barely even reserved against these fiascos. I swear, looking at the books at JPM must be like looking at your portfolio statement from a Janus or Munder fund. Anyone think that Greenie cut so much, b/c large lenders like JPM are really really f*cked, and they're too big to fail...... until they do!
1- Do any of you find it surprising that for a board of traders with 12k supposed members, only a half dozen or so have come to express their opinions on something that is so important to their careers. It once again shows that most people on these boards are amateurs and looking for the next hot fix, and not looking to learn about the economy or their future careers. I would EXPECT that this board would be 40 pages long by now.
2- I had never read Rogers that thoroughly, but I think that Fleck has pegged this all perfectly. I have read him every night, and thoroughly for a while now. He was the ONLY naysayer when greenie was diefied. I deserves the world's praise as just about the only person who was willing to stand up and say the truth. Too bad no one listened. Greenie is in the corner now, and there's no way out. He can't lower rates any more. At some point, banks will just stop lending, their charge off rates will be higher than the spread that they will gain. Did you see that consumer credit rose another 10b last month. We are a nation of borrowers. What happens when we can't borrow any more? I was aghast when greenie lowered rates 50bp. If anything, he should raise rates, let the system flush and we can go on. Sure, we'll have 2-3 years of high unemployment, and recession/depression, but at least we won't be mired in 20 years of Japanism. Their system cannot clear. I'm a young man. I'd prefer to trade even 3-5 years of economic reversals, if it would come with another period of 20 years of economic bliss. Maybe, our chairman then will be smarter and not let bubbles form.
On a final note, over the last week, I was looking through a list of HIGHLY speculative stock picks (trying to find anything investible in the rubble), mainly in optics, communications, and energy. It is absolutely amazing, in almost every stock out of 50, JPM was the largest creditor. I absolutely see no reason that they can stay solvent. Out of these 50 stocks, 45 won't make it. JPM has barely even reserved against these fiascos. I swear, looking at the books at JPM must be like looking at your portfolio statement from a Janus or Munder fund. Anyone think that Greenie cut so much, b/c large lenders like JPM are really really f*cked, and they're too big to fail...... until they do!
praetorian,
I think there were others who were right beside Fleckenstein in that regard, but their numbers are very small. Among them is the great Jim Grant (www.grantspub.com). One of the great financial thinkers today. Another is David Tice of www.prudentbear.com
Unfortunately, most of these 'alternative' viewpoints will never garner the public attention they deserve.
Good article:
http://quote.bloomberg.com/fgcgi.cg...t1_bbco&bt=ad_bottom_bbco&s=APb5APBTaV2h5IEph
I think there were others who were right beside Fleckenstein in that regard, but their numbers are very small. Among them is the great Jim Grant (www.grantspub.com). One of the great financial thinkers today. Another is David Tice of www.prudentbear.com
Unfortunately, most of these 'alternative' viewpoints will never garner the public attention they deserve.
Good article:
http://quote.bloomberg.com/fgcgi.cg...t1_bbco&bt=ad_bottom_bbco&s=APb5APBTaV2h5IEph
Reverend,
Thanks for the article - it is very thought provoking.
I am sure that I am in the minority here, but I think Greenspan has done a good job given the miniscule tools that he has at his disposal to correct shocks in the economy. The accelerated nature of economies in todays environment are unprecented, and AFAIK, there was no precedent in the history of the world for the productivity gains that people were surmising as companies like MSFT, INTC, etc, took hold during those years. It would have been interesting to compare what would have happened had the US stock market during the Industrial Revolution had a FED - we might have had comparisons to another paradigm shift in world economies, and the present FED would have had some wisdom to draw upon. Unfortunately, the history of the FED is all too young.
FWIW, I believe this country believes HUGELY on future inovation, and lives it's life like there will always be something new, particularly new technologies, that create enormous wealth and jobs. I agree with them, and those that are nimble and well informed enough will see the next big thing coming that will create wealth that will make even the 1993-1998 look like a joke.
There are two reasons for my belief, in order of less importance:
1) The mapping of the Human Genome will produce new technologies unforseen that will have incredible consequences, both positive and negative, to the world economy.
2) Quantum Mechanics and product from it are barely out of the diaper stage. The transistor, the first application of Quantum Mechanics, lead to the computer revolution and to several DOW components, both at the time and today [the Radio is and was the single most "successful" and anticipated retail item in the history of the world. Television, another product based on Quantum Mechanics, has since dwarfed the radio.]
I strongly suggest that those that do not keep up with scientific journals at least read:
http://www.amazon.com/exec/obidos/t...f=sr_1_1/102-2255061-8465705?v=glance&s=books
Stock markets are future discounting mechanisms. If we can come out of this recession standing, watch out! The next time one of these "bubbles" happens, [and we won't be waiting 150 years for the next one,] the FED will have greater wisdom to draw upon...
nitro
I think Jim Rogerâs article only scratches the surface on this issue! I also think the interest rates should be set by the markets themselves and based on supply and demand (how it used to be).
In my opinion it is possible that the present monetary policy will result in some severe financial dislocations in the future, and we may be forced to return the interest rate issue back to the markets themselves to decide after all!
The future generations may look back at our present system of rates being determined by one man (or a board) as an antiquated faulty system!!