MMV, to ascertain that Greenspan (or the US) are responsible for the meltdown in Asia is to forget about 10 years of monetary/fiscal management in Japan and the rim's nations. Greenspan had nothing to do with the Japanese bubble of the late 80's and the fact that Japan until today has not emerged from under the load of "bad debts" the bubble created.
As for blaming Greenspan for a bubble here in equities, I think it is a falacy. Greenspan has kept interest rates artificially high relative to actual inflation for three years running now, that to cool off any possible development of a bubble here. To the extent that you want to call the recent July highs in our equities market a bubble, fine, but the push in the first six months of this year were created by excess capacity flooding our markets as they escaped Japan and the rim, not from excessive easy money here.
In final analysis, we will see if AG managed the situation well or not. If the markets over the next few years manage to hold above 5000 and the country is not plunged into a secular recession (or depression, which I doubt very much), AG record will be that he managed the monetary spigot just right, always leaning against the wind with right policy for the time. He averted a major catastrophe after the meltdown of 1987, and so far seems on his way to avert a mini melt here in late October. I would say, so far so good in diametric opposition of your point of view. As always, the jury is still out.
Zeev |
