Now that Greenspan is no longer working for the government, he's once again turned into a capitalist.
In a rant he recently wrote for the WSJ, he said “The United States, and most of the rest of the developed world, is in need of a tectonic shift in fiscal policy ... Incremental change will not be adequate.”
He went on to say that “Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt problem. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80.
“The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. “[The] very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.”
He also says that yields on U.S. Treasuries have decreased in recent months (demand has increased) because of the European debt crisis--a situation that is likely only temporary. This is of course directly contradicting Bernanke's latest tirade against the Gold Rally in which he suggested that the low yields on US Treasuries in recent months were a sign of long-term stability (a pack of lies Latewire immediately called out).
10-year Treasury notes yielded 3.20 percent as of 12:11 p.m. in Tokyo on June 17th, down from the year’s high of 4.01 percent in April and compared with as high as 5.32 percent in June 2007, before the recession began. Yields continue to be low “despite the surge in federal debt to the public during the past 18 months to $8.6 trillion from $5.5 trillion". Greenspan says this shift in demand from European into American Bonds is “temporary.”
“Our economy cannot afford a major mistake in underestimating the corrosive momentum of this fiscal crisis,” Greenspan said. “Our policy focus must therefore err significantly on the side of restraint.”
I couldn't have said it better myself. Can you please tell your former underlings that?
UPDATE: Peter Schiff just released a VLOG where he said almost exactly the same thing. (131,612)
Occupation: Daniel is Medical Resident from the southwest US. Prior to medicine, he worked in IT as a consultant, programmer, web designer/developer, and technician.
He went on to say that “Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt problem. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80.
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