Dear Greenspan, Please Shut Up

by Mr Juggles

Dear Alan,

During your time at the Fed, you were famously circumspect. Now you can’t shut up. Please do so.

Yesterday, I was reading an article on Bloomberg detailing a recent talk you gave. You made a lot of points, probably a few too many. Let’s address a few.

  • “Obviously there is a limit to the extent that obligations to foreigners can reach,” Greenspan said in a speech in Washington yesterday. The dollar’s decline to its lowest since 1997 may be “an indication America is approaching this limit.”

    Thanks for the crack analysis, Alan. I don’t think I could have figured out that foreigners have finite resources. Also, I thought the dollars weakness might be somewhat related to the fact that you have encouraged rampant inflation by 1) artificially suppressing interest rates and 2) rigging the government statistics to make sure said inflation didn’t appear to the public other than in their weekly bills and (lack of) savings accounts.

  • Greenspan first predicted that investors abroad would tire of financing the U.S. current-account deficit in a Nov. 19, 2004, speech in Frankfurt. “A diminished appetite for adding to dollar balances must occur at some point.”

    Well thanks for addressing this issue while you still had some clout.

  • Greenspan also said yesterday that the August surge in the cost of credit following increased defaults on U.S. subprime mortgages was an “accident waiting to happen,” given that investors were pricing risk too cheaply.

    Again, Alan, I think you’re trying to rewrite history here, no? Were you not on watch while interest rates were held down. Does the Fed not have oversight of the banking and lending system? So I guess you are pretty much responsible for not forcing lenders to focus on credit quality.

  • The former Fed chief said central banks increasingly appear to have “lost control” of market interest rates beyond three to five years of maturity. Before departing the central bank in January 2006, he said the lack of increase in long-term Treasury note yields during a period of rising Fed rates was a “conundrum.”

    Alan, dude, this is not a conundrum. You don’t affect long-term interest rates any more because the markets don’t believe you. You are the central banker who cried wolf.

In conclusion, I would appreciate it if you would shut up, Alan. Ben has a hard enough job and is mucking it up enough already without you wading in every three days to provide running commentary. Your sonorous book has compensated you richly. Please retire to somewhere secluded, stocked with Ayn Rand pinups and preferably without a phone.

Mr Juggles
CEO and Head Commissary
Long or Short Capital

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