PDA

View Full Version : U.S. Issues Fed's Massive Stimulus Had Little Impact: Greenspan


petegz28
07-01-2011, 10:00 AM
The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.

In a blunt critique of his successor, Fed Chairman Ben Bernanke, Greenspan said the $2 trillion in quantative easing over the past two years had done little to loosen credit and boost the economy.

"There is no evidence that huge inflow of money into the system basically worked," Greenspan said in a live interview.

"It obviously had some effect on the exchange rate and the exchange rate was a critical issue in export expansion," he said. "Aside from that, I am ill-aware of anything that really worked. Not only QE2 but QE1."

Greenspan’s comments came as the Fed ended the second installment of its bond-buying program, known as QE2, after spending $600 billion. There were no hints of any more monetary easing—or QE3—to come.

Greenspan said he "would be surprised if there was a QE3" because it would "continue erosion of the dollar."

The former Fed chairman himself has been widely criticized for the low-interest rate policy in the early and mid 2000s that many believe led to the 2008 credit crisis.

Bernanke, who took over for Greenspan in 2006, began implementing the quantitative easing program in 2009 in an attempt to unfreeze credit and prevent a collapse of the US financial system. The strategy has gotten mixed reviews so far.

On Greece, Greenspan said a default is likely and will "affect the whole structure of profitability in the U.S." because of this country's large economic commitments to Europe, which holds Greek debt. Europe is also where "half the foreign [U.S.] affiliate earnings" are generated, he added.

"We can’t afford a significant drop in foreign affiliate earnings," Greenspan said.

Greenspan was also pessimistic about the U.S. deficit talks, saying he didn’t think Congress would reach an agreement on raising the debt ceiling by the Aug 2 deadline.

“We’re going to get up to Aug 2 and I think on that night, we are not going to have the issue solved,” he said.

If that happens, he said, the U.S. would have to continue paying debt holders or risk major damage in global financial markets. As a result, “we will default on everything else.”

He added: “At that point, I think we’ll all come to our senses.”


http://www.cnbc.com/id/43598606

BucEyedPea
07-01-2011, 10:08 AM
Greenspan is one to talk, being one the main architects of the artificially created Clinton/Bush economy that had to go bust sometime, which it did under Bernanke.

Why anyone continues to listen to any major figures from the Federal Reserve, all our leading politicians and financial experts including who not only failed to predict a collapse of housing prices (30-40%) who not only failed to predict a collapse in housing prices of 30 to 50 percent but also promises this was a temporary blip in long-term trends on housing values I will never understand.

ROYC75
07-01-2011, 10:16 AM
But But But, it's Bush's fault, all of it.

Doesn't anybody know the recession has ended, unemployment is under 8%, the economy is booming?

What's wrong with you people with these negative articles, comments,etc.

BucEyedPea
07-01-2011, 10:19 AM
But But But, it's Bush's fault, all of it.

It is also the fault of Bush since Greenspan inflated to bail him out of the recession he inherited from Clinton, who also resorted to a stimulus from Greenspan. That and the wars of Bush are a factor. Pat can defend him all he wants with numbers but when there isn't enough money those numbers are meaningless.

This has been about a 16 year-in-the-making economic problem. This is Keynesian economics at play. They are all Keynesians. Shouldn't we just blame it on all the Keynesians?

FD
07-01-2011, 10:41 AM
I think he's basically right. QE2 showed the markets he wouldn't let deflation happen, but its practical consequences on rates were minor.

BucEyedPea
07-01-2011, 10:44 AM
I think he's basically right. QE2 showed the markets he wouldn't let deflation happen, but its practical consequences on rates were minor.

What rates? Inflation rates?

ROYC75
07-01-2011, 10:50 AM
It is also the fault of Bush since Greenspan inflated to bail him out of the recession he inherited from Clinton, who also resorted to a stimulus from Greenspan. That and the wars of Bush are a factor. Pat can defend him all he wants with numbers but when there isn't enough money those numbers are meaningless.

This has been about a 16 year-in-the-making economic problem. This is Keynesian economics at play. They are all Keynesians. Shouldn't we just blame it on all the Keynesians?

No No No, it's clearly Bush's fault. Don't blame the D's one bit, do not put Dear I lead by my Peter Clinton into this. The surplus he had was misleading and Bernie baby tried to ward it off but couldn't because of the wars we were in. Our current ( dick ? ) Prez. want to hide more #'s and blame Bush & Co. to transition a new era into BIGGER Government.

OK, 2nd thought, blame the Keynesians, they trained these idiots we have on CH.

BucEyedPea
07-01-2011, 10:55 AM
No No No, it's clearly Bush's fault. Don't blame the D's one bit, do not put Dear I lead by my Peter Clinton into this. The surplus he had was misleading and Bernie baby tried to ward it off but couldn't because of the wars we were in. Our current ( dick ? ) Prez. want to hide more #'s and blame Bush & Co. to transition a new era into BIGGER Government.

OK, 2nd thought, blame the Keynesians, they trained these idiots we have on CH.

I agree the Ds are much, much worse. The only time a D president can take any credit is when his opposition party is in power in the other branches. Now that this has happened, we're seeing the current one assume dictator powers by subverting the substance and meaning of the Constitution to continue to spend.

KC native
07-01-2011, 11:10 AM
Who gives a fuck what Greenspan says? The man fucked the fed and our country.