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More encouragement from "Big Al" Greenspan

Former Federal Reserve chief Alan Greenspan cast doubt on the ability of the central bank to prevent a US recession in an interview to appear on Thursday.

Greenspan told the German weekly Die Zeit that the Fed or political policies could "probably not" keep the world's biggest economy from sliding into recession, as financial markets widely expected the US central bank to cut its main lending rate.

"The influences of the global economy today are stronger than almost any monetary or budgetary response," the German-language weekly quoted Greenspan as saying.

Although he left the post of Fed chairman two years ago, Greenspan's opinions on the economy are still sought after.

"Real long-term interest rates have much more influence over the heart of economic activity than national decisions," he was quoted as adding.

"And central banks have less and less power to influence long term rates."

The former Fed chief put the chances of a US recession at 50 percent, but added: "We have few indications that would allow us to say we are already there."

Some analysts have said that low interest rates under Greenspan's watch were responsible in part for the US housing bubble that burst last year, and led to the current financial crisis.

Die Zeit quoted him as saying he found it hard to understand that "the Federal Reserve policy had somehow allowed housing and stock prices to rise."

Fallout from the crisis, which began with a meltdown of the US market for high-risk, or subprime, mortgages, continues to rock international financial markets and now threatens the US economy with a recession.

For Greenspan however, the turmoil was "entirely the result of market forces at a global level."

The Fed's Open Market Committee (FOMC) was to announce its decision on US lending rates later on Wednesday.

It surprised markets last week by slashing the base Fed funds rate by three quarters of a percentage point to 3.50 percent, but it is widely expected to follow through with another cut to 3.0 percent.




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What a joke!!!

Greenspan acting like his policies of decades!!!! have nothing to do with where we are today???
He is arrogant,and to boot,he is also trying to make himself look like the hero in all of this-from the sidelines....
it's insane. You don't wake up one day,or in two years,to this mess.
It's all so orchestrated like a B rated movie.
Greenspan leaves,tells us from the sidelines what's 'going down' [b/c they planned it exactly the way he is telling it-it's what they also want us to believe will happen.] But make it look like there is a counterforce with Bernanke as a puppet-like the government is actually trying to 'help us' to get out of this.
Thesis-antithesis-solution