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Strategies & Market Trends : Ride the Tiger with CD
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To: pocotrader who wrote (149976)3/6/2009 5:07:39 PM
From: Nevada9999  Read Replies (2) of 313663
 
Volcker's rate hikes were the cause, but that is the Fed's job when GDP growth or price inflation start to get out of hand. Recessions can't or shouldn't really be avoided. As Faber puts it an economy without recessions is like a person that never sleeps.

Greenspan mostly did the opposite. Every time the economy tried to get a rest he put a cattle prod up its @$$. As Coxe points out, population growth was declining. GDP growth should have eased too, but Greenspan kept it increasing with debt and leverage via easy money. That is clearly unsustainable in the long run and thats where we are now. The economy needs to and will contract, and that is a very bad thing with all of the leverage that has built up. In short, we're screwed. It's the opposite of where we were in 1981 when the Fed was putting on the brakes. That's my opinion FWIW, and I'm a geologist, not an economist.
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