Greenspan was better at bubble spotting and irrational exuberance detection than the mass of Mindless Zombies who blew the bubbles by bidding up, up, up some more and to da sky!! Just as the person who supplies metres can't tell somebody how many metres of land to buy, a person who supplies monetary measures can't tell somebody how many dollars some land is worth.
You might have observed that it was way back in 1995 when our great, estimable and venerable idol Alan Greenspan discussed irrational exuberance and the difficulty in detection of it. He was ignored as the 1990s mania roared ahead. Margin requirements were lifted by some concerned brokers and interest rates were raised after the great Asian Contagion of 1998 and the Globalstar induced Long Term Capital Management implosion which led to the financial panic. Again, interest rates were hoisted into the 2005 2006 era as the housing boom was charging madly with people explaining that Greenspan was a moron for increasing interest rates.
It's amusing to see people still blaming Greenspan [and now Big Ben] for their own foolishness, ignorance, plain stupidity and greed. That's a well-trod psychological path and absolves the individuals of their guilt so that they are free to go ahead and do something as stupid again without the restraint of thinking that they themselves are the Zombies with the holes in their heads where the thinking part is supposed to be which monitors their thinking process which would observe their mistakes. Here you are, way back in 2002: Subject 53236
By 2004 it was obvious that house prices were silly and by 2005 when I looked in Escondido [California] prices were about double where they could reasonably be [though would still not be cheap at half the price]. Yet people kept bidding them up. Blaming Greenspan is absurd.
If gold spikes to crazy peaks, which it shows signs of leading to, it will not be Big Ben's fault either. He doesn't spend the money which runs up $trillions of USA government and private debt with no visible means of repayment. He just tries to keep the money system stable, with a bias to just a 3% royalty payment to the owners of the system and dirty great lumps via the government to friends such as Goldman Sachs, GM unions, and co.
Will you moan that the bubble in gold was Big Ben's fault, or the crash? There is plenty to buy that isn't gold if you don't want to hold US$.
Mqurice |
