By Douglas V. Gibbs
... So, why the doom and gloom?
Alan Greenspan: Interest rates on government bonds have never been lower
Therefore, according to former Federal Reserve Chairman Alan Greenspan, the bond market is on the cusp of a collapse that also will threaten stock prices.
But I thought the stock market was enjoying record climbs?
What goes up, must come down. . . especially when confidence stumbles because of the congressional collapse regarding Obamacare. Such things can cast doubt on Trump's plans, and doubt equals a reduction in confidence.
Greenspan says interest rate changes will also change things. The prolonged period of low interest rates is about to end and, with it, a bull market in fixed income that has lasted more than three decades.
"The current level of interest rates is abnormally low and there's only one direction in which they can go, and when they start they will be rather rapid," Greenspan said.
I am not a fan of governmental influence on the market, and it is because of monetary policy at the Federal Reserve that we have extreme boom-bust cycles, and with it, recessions, and depressions.
"The current level of interest rates is abnormally low and there's only one direction in which they can go, and when they start they will be rather rapid," Greenspan said.
I am not a fan of governmental influence on the market, and it is because of monetary policy at the Federal Reserve that we have extreme boom-bust cycles, and with it, recessions, and depressions.
During the Obama administration they artificially kept judgement day at bay so it wouldn't make "The One" look bad. Back then I said that if a Republican won in 2016, by late 2017 it would all collapse so as to point blame at the policies of the Republican President. . . even though the true blame should be pointed at the Fed (just as they were guilty for the Great Depression just a little under a century ago).
Greenspan did not criticize the policies of the current Fed. But he warned that the low rate environment can't last forever and will have severe consequences once it ends.
"I have no time frame on the forecast," he said. "I have a chart which goes back to the 1800s and I can tell you that this particular period sticks out. But you have no way of knowing in advance when it will actually trigger."
One point he did make about timing is it likely will be quick and take the market by surprise.
"It looks stronger just before it isn't stronger," he said. Anyone who thinks they can forecast when the bubble will break is "in for a disastrous" experience."
The Democrats are on the edge of their seats. They can't wait. The question is, can the increase in production and manufacturing offset it enough?
-- Political Pistachio Conservative News and Commentary
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