Janice, while I respect your comments, here and previously, I must disagree with your bottom line. His job is to protect the value of the dollar, keep it from eroding. With respect to his comments/questions he made the point of referring to Japan's stagnant economy which, he believes, stemmed from a terribly overheated stockmarket, banking excesses (some huge bad loans still aren't written off yet because of the effect doing so would have)and other machinatons.
The Fed, under Greenspan in particular but under others as well, will in fact cause a recession if they feel it is necessary for the longer term goal.
The non-farm payroll gains were offset by the unexpectedly large reduction in new job formation - way below estimates. The principal case he made had to do with a runaway stockmarket and the well-founded fear that a bubble burst would cause the Dow, Nasdaq, etc. to plummet like a cut-loose elevator from the World Trade Center's highest floor.
This was a well timed and regulated tiny pinprick, not a bubble-burster. The questions had the effect of shouting above the buying crowd's maddening din the words "LISTEN UP, FOLKS!" IMHO. Reread his words regarding the impulsive-like buying of stocks.
If the dollar plummets everything has the potential of caving in, particularly from a domino effect. The hole in the dike was small so he stuck in his pinky finger; had he let it go longer the dike might have burst and no amount of Greenspan, no svelte guy he, could have stemmed the downward rush. Again, IMHO.
Dee Jay |
