| Is Greenspan just a senile old idiot? |
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William Bobo
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| Is Greenspan just a senile old idiot? |
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Probably a bit provocative, but I really ask this sincerely because I don't know any economists.
Because I have quite a bit invested in the market I have to watch with trepidation whenever the old boy starts speaking. It seems the Fed always goes too far.
Consider the present situation. Inflation is under control and oil-prices are reaching panic levels which will surely slow the economy, yet still the Fed will continue to put a halt on the economy. The so-called housing bubble is self-correcting. It seems like the Fed are applying the brake after the car has stopped.
I have to wonder if this man is simply losing his marbles.
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Sat Aug 13, 2005 9:04 pm |
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William Bobo
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Well as I understand it the FRB is completely independent from the White House, and Greenspan seems to be doing exactly what he did late in the Clinton administration when he said he wanted to slow the economy and caused a recession in the process.
As for oil prices, they are not rising because of this Administration's policies, although over the last several decades little has been done regarding refining capacity by any administration, but rather because of good old supply and demand.
I was recently in India and everyone there is moving on up from bikes to motor-bikes to cars, and both motor-bike and car sales are growing at an astonishing 15% annually. I expect it is at an even crazier rate in China.
Add into the mix a hotter summer than usual in the East, a more intense hurricane season in the South, the terrorist threat and just regular speculation and you will get $60 to $70 oil. Bush didn't do it.
My worry is they will continue tightening way over the 4% that seems reasonable and in the process bring on another unnecessary recession.
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Sun Aug 14, 2005 10:02 pm |
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Niall
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Hi William Bobo
Well as said already Greenspan is an important person in decision making but is largly the face of rather than the whole show in the Reserve Bank.
You are right that the bank and the Govnt are seperate. We can thank and rushed and hushed congress meeting in the dead of night over a hundered years ago for that.
The Reserve bank is a private organisation with Shareholders  and Grenspan is the public face.
The shareholders are big business types and low interest rates make more spending and more spending make too much spending. Increase the interset rates and increase the interest take on the "too much spending" ie: increased debt.
Ah well thats my bla bla for today,
Cheers,
Niall
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Mon Aug 15, 2005 1:45 am |
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JasonL
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quote:
Originally posted by sarah
quote:
Originally posted by William Bobo
Well as I understand it the FRB is completely independent from the White House, and Greenspan seems to be doing exactly what he did late in the Clinton administration when he said he wanted to slow the economy and caused a recession in the process.
As for oil prices, they are not rising because of this Administration's policies, although over the last several decades little has been done regarding refining capacity by any administration, but rather because of good old supply and demand.
I was recently in India and everyone there is moving on up from bikes to motor-bikes to cars, and both motor-bike and car sales are growing at an astonishing 15% annually. I expect it is at an even crazier rate in China.
Add into the mix a hotter summer than usual in the East, a more intense hurricane season in the South, the terrorist threat and just regular speculation and you will get $60 to $70 oil. Bush didn't do it.
My worry is they will continue tightening way over the 4% that seems reasonable and in the process bring on another unnecessary recession.
The seven members of the Board of Governors are appointed by the President of the United States. The Chairman of the Board of Governors serves as Chairman of the FOMC.
As stipulated in the Banking Act of 1935, one of the seven Governors is appointed by the U.S. President to a four-year term as Chairman. This selection must be confirmed by the Senate.
If a Chairman expects to be reappointed, he should be cognizant of the needs of the President and his party.
I believe that this nation's involvement in Iraq as well as our war on terrorism is affecting the price of oil. This President, who is an oil man, and who has many other oil men working in the Admin with him, is not conducive to using his bully pulpit to encourage alternative energy sources. To that extent, yes, he is contributing to the increase in the POO. Further, he is not attempting to require that auto manufacturers build more energy efficient cars.
The tightening is necessary because this nation is in a bind.....huge budget deficit due to recent tax law changes, huge trade deficit, and falling dollar.
The tightening is an effort to bolster the dollar, which would likely collapse without this intervention.
you make a good point.. i never thought about it like that before.
E-mail me : jason@unrealconcepts.com
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Mon Aug 15, 2005 9:00 pm |
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vectorz
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It astonishes me how ignorant people can be to economics when they voice their opinion. You think the Fed just wants to increase interest rates just for fun to ruin your day?
Interest rates aren't based on somebody's mood for the day. Lowering the interest rate from 10% to sub 3% obviously has advantages (such as creating housing bubbles and making people rich quick overnight), however, there is massive consequences also.
If lowering interest rates was so one-sided and THAT easy, don't you think they would've done that earlier than 9/11? Economics are a fragile thing, there's is ALWAYS a large consequence to raising interest rates and lowering them. For every single person that got rich overnight from the Fed's interest rate mistake, err.. I mean lowering, there is 10 more people who will file foreclosure or bankruptcy once the dust settles.
Now, they're trying to raise the interest rate as soon as they can because they know they screwed things up in the long run and are trying to do damage control before it gets even worse.
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Mon Aug 29, 2005 10:20 pm |
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gators52
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I think Greenspans lowering of intrest rates was just, we lots tons of wealth from the tech bubble that popped in 2000 and those low intrest rates cause our economy not to sink like a log and helped us out of a recession. However I think he is now raising rates too high, inflation is now under controll and the I think the housing boom is just hyped up because the media missed the tech bubble. China is what is driving the oil prices up as their greatly incresing demand is causing a shortage and this the equiliberium price has to go up to meet supply and demand.
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Tue Aug 30, 2005 1:54 pm |
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