You would think after causing two of the biggest bubbles in history that Alan Greenspan would be exiled by now to some small island off the coast of Italy.
Instead, this aging ponzi-king keeps walking the streets like some half dead zombie content to still lecture the rest of us on the joys of central banking.
Today he’s upset that you boobs are so far reluctant to start another one of his central banker wet dreams—otherwise known as an asset bubble.
In fact, he went so far as to call you all a bunch of scaredy cats. Writing in the Financial times today the Maestro said:
“American households have shifted their cash flows from illiquid real estate and consumer durables to paying down mortgages and consumer debt…It is this rapid rise in aversion to illiquid risk that explains a large part of the anaemic recovery in the US.”
Fear, in other words, undermines America’s recovery
And if you would just jump in the magic bus and start borrowing and spending yourself to oblivion again this lack of aggregate demand stuff would cure itself in an instant.
Meanwhile that’s exactly what Ben Bernanke and his toady Brian Sacks are hoping for as they work to create the a third bubble.
In fact in a speech last week, Sacks essentially admitted as much when he said;
“Balance sheet policy can still lower longer-term borrowing costs for many households and businesses, and it adds to household wealth by keeping asset prices higher than they otherwise would be.”
All of which is nothing more that old Fed black magic that created the first two debacles—the Greenspan Put.
Speaking of debacles, the current mess shows no signs of letting up.
From Gallup by Dennis Jacobe, Chief Economist, entitled: Gallup Finds U.S. Unemployment at 10.1% in September
“PRINCETON, NJ — Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September — up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month — the unemployment rate was 9.4% in mid-September.
Certain groups continue to fare worse than the national average. For example, 15.8% of Americans aged 18 to 29 and 13.9% of those with no college education were unemployed in September.
The increase in the unemployment rate component of Gallup’s underemployment measure is partially offset by fewer part-time workers, 8.7%, now wanting full-time work, down from 9.3% in August and 9.5% at the end of July.”
Needless to say, that could make for an interest jobs report tomorrow morning.
As for Alan, I just wish he’d go away for good and take Ben Bernake with him.
Alan the Preposterous Rides Again
Greenspan: “We are on the Brink”
Greenspan Sees a Bottom, Foreclosures Soar
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