IMF’s Strauss-Kahn Seeks Recovery First “Then” Deal With Inflation

September 28, 2009 by · Leave a Comment
Filed under: Economic News 

Here you have it, I have been saying we are going to have a bout of inflation in a period of high unemployment and stagnating incomes.  Here is the quote from the International Monetary Fund’s (IMF) Managing Director, “Going out of the crisis will have consequences, we need to discuss an exit strategy,  But we need to secure the recovery before we address the problem” of inflation“.  To follow up, former Federal Reserve Chairman Alan Greenspan in a video conference made this statement as well, “In the next two to three years, we are going to have serious problems“.

With that being said, it fits with what statements have been made here against all these bailouts that were in effect “kicking the can” down the street and in my opinion, making the problem even worse that have not create large liabilities for the U.S. Government that  has affect our credit in the international community.  This weekend I wrote my “Theory of Deinflation” that addresses some of these issues in a manner to try and explain what is happening now and what we will see in the future.  (The Theory will be expanded as more thought is put into the subject).

Bloomberg, Kiev – Former U.S. Federal Reserve Chairman Alan Greenspan expressed concern over inflation, while Dominique Strauss-Kahn, the International Monetary Fund’s managing director, speaking to the Yalta European Conference in southern Ukraine, suggested first securing an economic recovery.
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U.S. Recession will be worst since 1930s according to Greenspan

February 20, 2009 by · Leave a Comment
Filed under: Stock Market News 

Well are we just waking up to this fact?  I would also add that it should be the worst “depression” since the 1930s.  We broke some important technical supports on the Dow Jones Index today so I believe we will here markets technicians declare we have officially entered into a “bear” market and we should see a sell-off that will bring us to the next support levels which I believe are below 7,000.  Thanks Alan for allowing us to get into this environment by keeping interests so low after the tech bubble.  We should taken our recession like a man and not the easy way out.

News:

 Former U.S. Federal Reserve Chairman Alan Greenspan said on Tuesday the current global recession will “surely be the longest and deepest” since the 1930s and more government rescue funds are needed to stabilize the U.S. financial system.

“To stabilize the American banking system and restore normal lending, additional TARP funds will be required,” Greenspan said in a speech to the Economic Club of New York. The U.S. Treasury’s Troubled Asset Relief Program designed to help bail out banks has been partially successful, he said.

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Greenspan Concedes to `Flaw’ in His Laissez-faire Market Ideology

October 23, 2008 by · Leave a Comment
Filed under: Opinion 

Finally, why does it take 6 years for someone to admit an obvious mistake?  If you think leaving our benchmark interest rate at 1% for 41 months straight that causes the biggest asset bubble ever isn’t a mistake, than I don’t know what is.  And I would not call it a “flaw”, more like a BIG F^&^($ FLAW to start.

The writing is on the wall and at this point the best option is to let this problem explode and let companies fail, no matter how big so we can get rid of all this bad debt and then we can start with a fundamentally sound base and at that point we can address the problems that helped this disaster ie: reduction of the middle class, debt-based money and under-education of the lower and middle classes (and the upper as well). 

Bloomberg:

 Former Federal Reserve Chairman Alan Greenspan said a “once-in-a-century credit tsunami” has engulfed financial markets and conceded that his free-market ideology shunning regulation was flawed.

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Alan Greenspan: “Other Major U.S. finance firms may fail”

September 14, 2008 by · Leave a Comment
Filed under: Bank Failure, Economic News 

Well it is nice to hear Greenspan talk some reason and not jump on the bailout wagon. Companies failing in a free-market economy is a normal occurrence and actually “shows” the market working. If you make bad decisions then you should face the consequences no matter how big you are. I am not advocating if you provide some other useful service that we should let that run to the wayside (ie: Fixed rate mortgages via the GSE’s). Hopefully Paulson is finally ready to let the tide out.

Article:

Former U.S. Federal Reserve Chairman Alan Greenspan on Sunday said he suspected “we will see other major financial firms fail,” but said it did not need to be a problem. It depends on how it is handled and how the liquidations take place,” Greenspan said on the ABC program, “This Week.” “And indeed we shouldn’t try to protect every single institution. The ordinary course of financial change has winners and losers.”

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