Re: We can thus conclude that rather being seen as an inflation fighter, the FED should be regarded as the sole source of inflation
Scumbria,
Blah blah blah... For every article you find, I can find one to match you. I thought you'd appreciate this one, so what will happen if Greenspan is removed?
chic
Greenspan could stop stocks if he resigned
NEW YORK - If Fed Chairman Alan Greenspan is serious about wanting to stop rising stock prices, his best alternative now is to announce his resignation.
Nov. 7, Election Day, would be a good effective date, providing cover for the Fed from presidential politics and giving investors time to adjust to the loss of the man they've come to view as their patron saint.
Why should he walk away less than three months after agreeing to a fourth term?
Because Greenspan has become a legend in his own time, making his job perhaps impossible. His reputation for saving the markets from ruin and nurturing the U.S. economy's longest expansion ever has encouraged investors to take more risk, to bid stock prices higher, to create the excessive wealth that he now publicly laments. Quick gains in stock wealth, he has said, are encouraging consumer and corporate spending, adding a percentage point of annual growth to the economy and threatening instability.
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He's also seen as the inevitable savior if something goes wrong. He nursed the stock market back from the 1987 crash, helped banks recover in the early 1990s from bad real estate loans and helped save world finance in 1998 from the Russian debt default and the collapse of hedge fund Long-Term Capital Management. Greenspan has become a larger-than-life character in what Yale economist Robert Shiller calls a naturally occurring pyramid scheme.
"In a strange way, his very success becomes detrimental to his continued success," says fan John Manley, a stock strategist at Salomon Smith Barney.
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Resigning would require no political support, just courage and self-denial. It would remind investors of the risk of change. Manley scoffs at the idea, "To deny the country the best man for the job would not be something he should do." Kaufman chuckles, "I think he truly likes what he is doing." |
