Alan Greenspan's Deluded Sense Of Reality
"I recognise that I accord a much larger economic role to equity prices than is the conventional wisdom. From my perspective, they are not merely an important leading indicator of global business activity, but a major contributor to that activity, operating primarily through balance sheets. My hypothesis will be tested in the year ahead. If shares fall back to their early spring lows or worse, I would expect the “green shoots” spotted in recent weeks to wither.
Stock prices, to be sure, are affected by the usual economic gyrations. But, as I noted in March, a significant driver of stock prices is the innate human propensity to swing between euphoria and fear, which, while heavily influenced by economic events, has a life of its own. In my experience, such episodes are often not mere forecasts of future business activity, but major causes of it."
There are many forms of intelligence. One I value most significantly is acquired intelligence or wisdom. There are very few ways to cheat the process. Wisdom is only available through life's experiences or by learning from other's life experiences be it history or those around us. Regardless, the process of acquired intelligence is time dependent.
It's very disappointing to hear the person most responsible for global economic ideology for the past twenty years utter the words above. On the very topic for which Greenspan was supposedly an expert, he is apparently an intellectual nincompoop at the ripe old age of eighty three.
If Alan had grown up in most American families and actually had to work for a living instead of being a life-long politician, he would realize wealth is not created by blowing bubbles. The above remark is completely absurd. Seemingly Greenspan believes as long as the government can make more money without working for it, asset prices will rise. That will lead to ever greater prosperity. Isn't this ideology exactly why we have the global economic crisis today? Greenspan never learned from history or its elders. And because the entire world's economic leadership embraced this ideology, the global economy is imploding.
Stock prices, to be sure, are affected by the usual economic gyrations. But, as I noted in March, a significant driver of stock prices is the innate human propensity to swing between euphoria and fear, which, while heavily influenced by economic events, has a life of its own. In my experience, such episodes are often not mere forecasts of future business activity, but major causes of it."
There are many forms of intelligence. One I value most significantly is acquired intelligence or wisdom. There are very few ways to cheat the process. Wisdom is only available through life's experiences or by learning from other's life experiences be it history or those around us. Regardless, the process of acquired intelligence is time dependent.
It's very disappointing to hear the person most responsible for global economic ideology for the past twenty years utter the words above. On the very topic for which Greenspan was supposedly an expert, he is apparently an intellectual nincompoop at the ripe old age of eighty three.
If Alan had grown up in most American families and actually had to work for a living instead of being a life-long politician, he would realize wealth is not created by blowing bubbles. The above remark is completely absurd. Seemingly Greenspan believes as long as the government can make more money without working for it, asset prices will rise. That will lead to ever greater prosperity. Isn't this ideology exactly why we have the global economic crisis today? Greenspan never learned from history or its elders. And because the entire world's economic leadership embraced this ideology, the global economy is imploding.
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