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Alan Greenspan: Money Printing Didn’t Work

FORMER FED CHAIR SAYS “STIMULUS” WASN’T SO STIMULATING AFTER ALL …

By FITSNEWS || Former Federal Reserve chairman Alan Greenspan – himself a supporter of liberal monetary policy – is blasting the massive money-printing “stimulus” that took place under his successor Ben Bernanke (and which is continuing to some extent under current Federal Reserve chairwoman Janet Yellen).

In an interview with The Wall Street Journal, Greenspan – who ran the Fed from 1987-2006 – said the secretive central bank’s “quantitative easing” plan did not accomplish its objectives. He also said the removal of the artificial “stimulus” from the economy would be painful.


Great …

For those of you keeping score at home, the first round of quantitative easing, known as “QE1,” took place from November 25, 2008 through March 31, 2010. Over that period, the Federal Reserve added $1.7 trillion to its balance sheet ($300 billion in Treasuries, $1.2 trillion in mortgage backed securities and $175 billion in agency bonds). The second round, dubbed “QE2,” took place from November 3, 2010 through July 1, 2011. Over that period, the Fed added $600 billion in Treasuries to its balance sheet.

Another so-called stimulus plan offsetting longer term securities with the sale of short-term debt (a.k.a. “Operation Twist”) began in September 2011 – and was extended in June of 2012.

And of course in September 2012, the Fed began its latest and greatest round of money printing – an open-ended commitment to create $85 billion in new assets each month. In January 2014, the Fed began to “taper” this commitment – reducing its money-printing by $10 billion a month.

Soon, the money presses will be shut down completely … but to what end?

Everybody knows what this grand experiment was … the greatest redistribution of wealth from the poor and middle class to the rich ever .

If you don’t believe us, ask one of the architects of the plan. He’ll tell you.

And now Greenspan, the “Maestro” himself, is weighing in on the broader economic failure of this redistribution …

“Effective demand is dead in the water,” Greenspan told the WSJ, adding the money-printing “did not work.”

He added that he “didn’t think it was possible” to unwind the money-printing without adverse consequences to an economy that’s become hooked on the drug.

“We’ve never had any experience with anything like this, so I’m not going to sit here and tell you exactly how it’s going to come out,” he said, adding that the pressure to raise interest rates would likely come from the market, not the central bank.

Greenspan’s advice?

He encouraged investors to buy gold … arguing it was not subject to the whims of government monetary policy.

Awesome … now he tells us, right?

Of course if at first you don’t succeed … print, print again.


http://www.fitsnews.com/2014/10/29/alan-greenspan-money-printing-didnt-work/#25uTy4pF1JX8ejTg.99

Another good article:

Alan Greenspan: QE Failed To Help The Economy, The Unwind Will Be Painful, "Buy Gold"

http://www.zerohedge.com/news/2014-10-29/alan-greenspan-qe-failed-help-economy-unwind-will-be-painful-buy-gold

a better source:


Former Federal Reserve Chairman Alan Greenspan said Wednesday that the Fed’s bond-buying program, which aimed to lower unemployment and spur stronger economic growth, fell short of its goals.

Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases.

He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage-backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy.

“Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” said Mr. Greenspan. Boosting asset prices, however, has been “a terrific success.”

Mr. Greenspan, who ran the Fed from 1987 to 2006, was generally downbeat on the economy and the state of central bank policy around the world. Once lauded as the “The Maestro” for his stewardship of central bank policy, he has come in for criticism for his handling of monetary policy during the housing market bubble that burst and was followed by the most severe financial crisis and economic downturn since the Great Depression.

Asked whether he regrets not doing more with Fed policy to stop the financial-market bubbles that preceded the crisis, Mr. Greenspan said “no.”

He observed that history shows central banks can only prick bubbles at great economic cost. “It’s only by bringing the economy down can you burst the bubble,” and that was a step he wasn't willing to take while helming the Fed, he said.

The Fed has held its benchmark short-term interest rate near zero since the crisis in an effort to spur economic activity. Many investors believe the central bank will start raising rates in the middle of next year, a view some top officials have encouraged.

The question of when officials should begin raising interest rates is “one of those questions I cannot answer,” Mr. Greenspan said.

He also said, “I don’t think it’s possible” for the Fed to end its easy-money policies in a trouble-free manner.

“We’ve never had any experience with anything like this, so I’m not going to sit here and tell you exactly how it’s going to come out,” Mr. Greenspan said. But he noted that markets often react to changes in central bank policy unpredictably and not entirely rationally. Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets, so there is no reason to suspect that the actual process of boosting rates would be any different, Mr. Greenspan said.

He said the Fed may not even have that much power over the timing of interest-rate increases. The problem as he sees it is an interest rate the Fed pays on the money banks park at the central bank, called reserves. Fed officials plan to use this tool as their primary lever for raising interest rates when the time comes. If bankers decide to put this money to work, creating inflation risks, the Fed may be forced to raise rates, even if the economy isn't ready for it, he warned.

“I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves,” Mr. Greenspan he said.

Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.

He was also downbeat about Europe and said the only way the euro can survive over the long run is through full political integration of the 18-country area that shares the currency. Anything short of that will allow imbalances to fester and build, eventually leading to a collapse of the currency, he said.

http://online.wsj.com/articles/former-f ... 1414597627

A statement by the former head of the FED that you should dump dollars for gold is huge. Unfortunately, most Americans don't even know who runs the FED. Only 24% of people asked knew that it was Janet Yellen. 1 out of 6 thought Greenspan was still in charge. So, they will not pay any attention.

planosteve wrote:A statement by the former head of the FED that you should dump dollars for gold is huge. Unfortunately, most Americans don't even know who runs the FED. Only 24% of people asked knew that it was Janet Yellen. 1 out of 6 thought Greenspan was still in charge. So, they will not pay any attention.

He never said to dump the dollar for gold.

John in Plano wrote:

planosteve wrote:A statement by the former head of the FED that you should dump dollars for gold is huge. Unfortunately, most Americans don't even know who runs the FED. Only 24% of people asked knew that it was Janet Yellen. 1 out of 6 thought Greenspan was still in charge. So, they will not pay any attention.

He never said to dump the dollar for gold.

"Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments." Same difference. At any rate it's huge. Sort of like the Pope announcing he's actually a Muslim. Will be interesting to see if the Brinkster mentions It this weekend.

The world has no shortage of doom-saying economists ready to advise investors to stock up on gold against a coming financial catastrophe. Until recently, none of them could claim to be a former Chairman of the Federal Reserve Board.

On Wednesday, though, as the Federal Open Market Committee prepared to announce the end of the years-long asset purchase program known as Quantitative Easing, Alan Greenspan, the near-legendary Fed chair whose every utterance used to be parsed by market watchers, spoke before the Council on Foreign Relations and advised listeners that under current conditions, gold is probably a good investment.

According to Wall Street Journal reporter Michael S. Derby, "Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments."

http://www.cnbc.com/id/102136750#.

planosteve wrote:

John in Plano wrote:

planosteve wrote:A statement by the former head of the FED that you should dump dollars for gold is huge. Unfortunately, most Americans don't even know who runs the FED. Only 24% of people asked knew that it was Janet Yellen. 1 out of 6 thought Greenspan was still in charge. So, they will not pay any attention.

He never said to dump the dollar for gold.

"Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments." Same difference. At any rate it's huge. Sort of like the Pope announcing he's actually a Muslim. Will be interesting to see if the Brinkster mentions It this weekend.

Yep....... he never said what you claimed

Yep....... he never said what you claimed

I tend to speak in plain English, not Greenspan's FED speak.

Greenspan was an advocate of the gold standard in the 1950s.
He seemed to forgot about it while he ran the FR.
Now he has remembered it.

BillB wrote:Greenspan was an advocate of the gold standard in the 1950s.
He seemed to forgot about it while he ran the FR.
Now he has remembered it.

Yes. He was one of Ayn Rand's inner circle. The essay he wrote was a classic defense of gold. So, as a FED chairman he was a whore. At age 88 I think he is trying to buy back the credibility that he trashed before he dies.

planosteve wrote:

Yep....... he never said what you claimed

I tend to speak in plain English, not Greenspan's FED speak.

He was speaking as a private citizen in plain English with words that gave distinct meanings.

now go find another birther/thermite/mininuke/munitionsforislam blogger claim for my daily chuckle

John in Plano wrote:

planosteve wrote:

Yep....... he never said what you claimed

I tend to speak in plain English, not Greenspan's FED speak.

He was speaking as a private citizen in plain English with words that gave distinct meanings.

now go find another birther/thermite/mininuke/munitionsforislam blogger claim for my daily chuckle

Did he recommend buying gold as an investment or not?

John in Plano wrote:

John in Plano wrote:

planosteve wrote:A statement by the former head of the FED that you should dump dollars for gold is huge. Unfortunately, most Americans don't even know who runs the FED. Only 24% of people asked knew that it was Janet Yellen. 1 out of 6 thought Greenspan was still in charge. So, they will not pay any attention.

He never said to dump the dollar for gold.

What the heck does that even mean.."dump dollars for gold."

You spend dollars to BUY gold..if you're Steve, that is.

You can't buy dollars with gold though..nor can you buy anything else with gold.

You make jewelry out of it.

GFB wrote:You can't buy dollars with gold though..nor can you buy anything else with gold.

You make jewelry out of it.

Bullion Coins, ETF's like GLD, Mining Stocks. There's all kinds of ways to invest in gold.

planosteve wrote:

GFB wrote:You can't buy dollars with gold though..nor can you buy anything else with gold.

You make jewelry out of it.

Bullion Coins, ETF's like GLD, Mining Stocks. There's all kinds of ways to invest in gold.

..then you go pray at the altar of the "greater fool theory."

GFB wrote:

planosteve wrote:

GFB wrote:You can't buy dollars with gold though..nor can you buy anything else with gold.

You make jewelry out of it.

Bullion Coins, ETF's like GLD, Mining Stocks. There's all kinds of ways to invest in gold.

..then you go pray at the altar of the "greater fool theory."

Wow. Then you must think that China is really really stupid.

China should accumulate 8,500 tonnes in official gold reserves, more than the US, according to Song Xin, President of the China Gold Association, General Manager of the China National Gold Group Corporation and Party Secretary. He wrote this in an opinion editorial published on Sina Finance July 30, 2014. Gold is money par excellence in all circumstances and will help support the renminbi to become an international currency as “gold forms the very material basis for modern fiat currencies”, Song notes. In the short term the Chinese will not back the renminbi with gold (establish a fixed renminbi price for gold

https://www.bullionstar.com/blog/koos-j ... ves-8500t/

planosteve wrote:Gold is money par excellence

Yes..an idiot said that..he should have bought thorazine instead.