Wednesday, Sep 09, 2009
Alan Greenspan's predictions
BBC: Market crisis 'will happen again'
However, he think the next crisis will be completely different and unfortunately
he doesn't seem to think we can see these crises coming.
Perhaps he ought to have read Housepricecrash a few years ago.
Posted by tenyearstogetmymoneyback @ 08:07 AM (508 views) Add Comment
7 Comments
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1. will said...
He's right of course - later on this year.
2. Powerofnow said...
He acknowledges that unbridled speculation (similar to greed) causes the bubble and consequent bust - "unless someone can change human nature we will have more crises". Brilliant Idiot.
He even identifies the that these boom busts have been occurring regularly since the 18th century.... we're getting somewhere. Surely he's not going to ask himself the question 'what did we start doing differently at that point in our history'?
3. denzil said...
Greenspan is a fool. He either refused or failed to see the crisis in the US during his tenure so what makes him think he can see another one? However, he is probably correct, but the average GCSE student would probably tell you another crises is likely, as it is about as predictable as the sun rising and setting.
4. mark wadsworth said...
Of course you can see them coming.
You get a credit/asset price bubble and then a bust.
These cycles have been going on for centuries (e.g. South Sea Bubble). Fix credit bubbles with proper banking supervision, fix asset price bubbles with Land Value Tax. There'll still be commodity price bubbles (like food or oil over the last couple of years, and maybe gold at the moment) or share prices (which in turn have a lot to do with government sanctioned barriers to entry, subsidies for particular industries etc.) but these are much shorter lived, involve smaller amounts of money, involve much less leverage etc. and are hence nothing to worry about in the grander scheme of things.
5. mrmickey said...
It appears that it is innovation driving these bubble, the current one started with the internet revolution and the last big one was driven by the invention of radio and other new communication mediums back in the early part of the last century, I wonder what innovation will drive the next bubble.
6. icarus said...
A major reason for the housing bubble, according to Michael Hudson and others, is the $3 trillion or so surplus dollars thrown out by US foreign trade deficits, military spending and the purchase of foreign industries by the US and held by central banks in Asia and the oil states. These central banks have to recycle these funds and real estate is the only asset class big enough to absorb them, given that the US won't allow them to buy most US industrial, infrastructural or utility assets. Hence the massive holdings of these banks in Fannie and Freddie. The bailout of F&F bondholders probably had a lot to do with the implicit guarantee the US had to give to China etc. in order to keep the T-bill sale and recycling game going.
7. alan_540 said...
@3 mark wadsworth...
I think greed will always find a way. I agree with your credit/property regulatory ideas, however, if these were successful I can onlt presume the folks who like moving markets to make massive profits will only find another way to screw us!