Greenspan doubts Fed's ability to prevent recession. Who else agrees with this assessment?

YAHOO NEWS

Wed Jan 30

Greenspan told the German weekly Die Zeit that the Fed or political policies could %26quot;probably not%26quot; keep the world%26#039;s biggest economy from sliding into recession, as financial markets widely expected the US central bank to cut its main lending rate.

http://news.yahoo.com/s/afp/20080130/pl_...

Greenspan doubts Fed%26#039;s ability to prevent recession. Who else agrees with this assessment?finance

Borrowing to fix a problem borrowing caused makes so much freaking sense doesn%26#039;t it?

Greenie%26#039;s right we%26#039;re in for it and we need to man up and take our medicine before we screw it up beyond repair

Greenspan doubts Fed%26#039;s ability to prevent recession. Who else agrees with this assessment?

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I would feel that way even without Greenspan%26#039;s comments.|||it%26#039;s too early to tell. fed may drop rates again today. what happens with the economic stimulus package? will the gov%26#039;t pass a bill allowing more people to refinance their mortgages? a lot can happen and if all those things happen, then i%26#039;d say there is about a 65% chance that we avoid one, however i think we stall until after the election.|||I agree and have agreed with this for a long time. Furthermore, the Governments Stimulus Pkg isn%26#039;t going to help either, just put us more in debt, and the recession will still be upon us, some states sooner than others. By the way, I am from Michigan, whose State has been in deep trouble for a few years now.|||Its unlikely the Fed or any stimulus package can stall the recession. The recession fuel by a lender inspired morgage crisis has shaken consumer confidence, combined with a huge debt load.

However, These measures will cushion the recession and I dont expect it will be worse than the Silicon Valley inspired burst bubble a few years back.

Buy low...sell high|||The only thing that will end this economic spiral down is to end this war and occupation in Iraq. The market reflects this because traders and investors are nervous.

The more Bush talks about staying there indefinitely the more the stocks decline.|||Why the fed has to cut, cut, cut those rates fast and hard!|||I read his assessment, I agree. Global market factors have extended beyond the control of simple policy adjustments to correct economic imbalance.|||I have to agree with Greenspan although i hope it will not be as bad with the feds ability to try.(Hugs)|||Bush%26#039;s out of control spending can not be fixed by Borrowing more money or lowering interest rates.|||Greenspan has been all gloom and doom about the economy for the last 10 years or so.|||Considering that he is one of the least accurately quoted people on the planet I would not put too much into this.

Alan Greenspan does not mean that the Fed should do nothing, as is quite clear from his tenure, but rather that the Fed can%26#039;t be expected to fix every problem that arises in the economy.|||Also quoted from the article:

%26quot;

Some analysts have said that low interest rates under Greenspan%26#039;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 %26#039;the Federal Reserve policy had somehow allowed housing and stock prices to rise.%26#039;

%26quot;

I agree with the analysts. What%26#039;s so hard to understand? The Fed pursued policies that prompted massive increases to the money supply. That additional money was inserted at two primary place: in the capital markets and to loans for homes. When an increased amount of money chases the same amount of goods, the price of those goods rises. In the case of housing especially, rising prices passed false signals to builders to increase construction and to lenders to increase lending (since the prices on the collateral was thought to always rise).

We are going through a period now when those false signals are being recognized and the results of the errors made corrected. That the Fed is trying to solve the problems with the actions that caused them is either stupid or evil.|||Well... let%26#039;s see... yes, I do.

Bernanke is a professor of economics, unlike the mastero himself. Bernanke goes by the text-book of Keynesian economics.

Got a recession?: print more money, and lower interest rates.

This supply side economics cannot prevent a recession. It can only create a man-made phenomenon known as %26quot;Stagflation%26quot;, where the economic growth is slow or unresponsive, with high inflation as a result of the injection of excessive liquidity.

In order for Bernanke to actually solve this problem, he has to read another book that he hadn%26#039;t read in school: Austrian economics of the Ludwig von Mises school of economics.|||I agree. And we may not actually tip into recession anyway. What the Fed is doing will help, and definitely soften the impact, but we are headed toward an economic slowdown.|||I have to certainly agree with Greenspan, his financial abilities are undeniable. and I%26#039;m very concerned about his resigning/retiring his position, ironically when his forecast began to take light.