This is the article that the Greenspan quote came from that popped the market today; I don’t know how accurate it is (holographic image?) but
Gold price riding high on fear of terrorism, says Greenspan
Leo Lewis, Tokyo
February 09, 2006
http://tinyurl.com/98gdp
Excerpt:
"ALAN Greenspan, who stepped
down last week as chairman of the US Federal Reserve after 18 1/2 years, has
blamed the threat of terrorism for the high gold price, in his first private
sector speech since being let off the leash of officialdom.According to
members of his audience of international investors – watching a holographic
image in Tokyo as he spoke in New York – Greenspan said the high cost of gold
did not reflect inflation or the strength of commodities, but rather a fear
among investors of a major geopolitical conflict. There were people who believed
that a nuclear weapon could be detonated within five years, the former American
central bank supremo said.
The low probability of such an event occurring would not necessarily avert a
spike in the gold price, he added.
Greenspan went on to discuss a range of topics, including the problems
created by a lack of investment in refining capacity by the oil industry. He
said this failure by the oil majors meant that the era of cheap energy was
almost surely over.
The former Fed chairman is also said to have indulged in a moment of
self-criticism over the central bank’s failure to prevent the market bubble in
the late 1990s.
That may explain Gold’s $20 whackage yesterday, but what about all the rest of the metals and commodities?
Also, if you missed this, you MUST read it:
GREENSPAN SENDS MIXED SIGNALS IN FIRST DAY AT HOME
Former Fed Chief’s Inscrutable Statements Baffle Wife
http://www.borowitzreport.com/archive_rpt.asp?rec=1307&srch=
Its a hoot!
and on the chance the article disappears, I’ll archive it after the jump . . .
Gold price riding high on fear
of terrorism, says Greenspan
Leo Lewis, Tokyo
09feb06
http://www.theaustralian.news.com.au/common/story_page/0,5744,18084883%255E643,00.html
ALAN Greenspan, who stepped down last week as chairman of the US Federal
Reserve after 18 1/2 years, has blamed the threat of terrorism for the high gold
price, in his first private sector speech since being let off the leash of
officialdom.
According to members of his audience of international
investors – watching a holographic image in Tokyo as he spoke in New York –
Greenspan said the high cost of gold did not reflect inflation or the strength
of commodities, but rather a fear among investors of a major geopolitical
conflict. There were people who believed that a nuclear weapon could be
detonated within five years, the former American central bank supremo said.
The low probability of such an event occurring would not necessarily avert a
spike in the gold price, he added.
Greenspan went on to discuss a range of topics, including the problems
created by a lack of investment in refining capacity by the oil industry. He
said this failure by the oil majors meant that the era of cheap energy was
almost surely over.
The former Fed chairman is also said to have indulged in a moment of
self-criticism over the central bank’s failure to prevent the market bubble in
the late 1990s.
He admitted that at the time he and his colleagues could not see that the
notion that they could deflate a bubble with incremental rises in rates was an
illusion.
Greenspan’s decision to appear in public so soon after stepping down from the
Fed clearly demonstrates that the revered figure in central banking is not one
to revel in retirement, after almost two decades at the Fed.
The 79-year-old is believed to have earned $US120,000 ($162,000) from his
one-hour speaking engagement.
Greenspan revealed that on his first day of retirement last week he told his
wife how strange it was to wake up and not worry about what had happened on the
Tokyo market the night before.
The question of where he would deliver his first public speech since
retirement had been the subject of fierce debate and intense commercial rivalry.
Wall Street investment banks, including Goldman Sachs, Morgan Stanley and
Citigroup, are understood to have offered to pay him large sums for his time,
but they were beaten by CLSA, an aggressive securities firm based in Asia which
runs an annual forum on Japan for investors.
Two years ago Bill Clinton, the former US president, gave the opening speech
at the forum – also via hologram – for which he was paid $US200,000.
From the comfort of an apartment in New York, Greenspan fielded questions
from investors and offered some cheer by declaring that after years in the
wilderness Japan was a normal economy again.
The Times
Sounds like he’s still on the job fluffing the american dollar. Isn’t it somewhat disingenuous to be claiming that cheap energy is gone because of a lack of refinining capacity? This just after Kuwait announces they only have half the reserves that they have been claiming for decades?
The gold price is due to terrorism thing smells similarly to me. Let me ask this, did gold prices just go down while islamic protest is achieving new highs?
Was it fear of a nuclear detonation that drove people into a feeding frenzy over houses also? Alan G “earned” two-thirds of his yearly salary as Fed chairman with this one hour “extravaganza”. What a guy!
alan is similarly distracted by this, I think, different piece.
Given his previous stipend at the Fed this note:
The 79-year-old is believed to have earned [not merely to have been paid, notice]$US120,000 ($162,000) from his one-hour speaking engagement.
obviously announces that he’s not trucking with those under-paid low-lifes anymore.
And that means he can let it all hang out, fortissimo, animatto,…
Performance art: just the catharis he needs after accumuating decades of horrifically convoluted, measured pontification. The sass is on.
Let her rip Alonzo.
120k to hear his opinion on terrorism fear? If I paid him that much money for a speech, I would want to hear his ideas on how the fed’s liquidity pump is affecting gold prices.
Plus, if fear of terrorism is really a factor causing people to buy gold, I wonder why the are not selling equities since markets were at multi-year peaks when gold was near its high?
To Alan Greenspan, it would be ….” What a relief” but to Ben Bernake, I am sure he would face the music very soon as the Alan Greenspan engineered economic recovery is just a disguised prosperity built on 1) Easy Credit , 2) Housing Bubble as well as a frantic 3) Personal Consumption not backed up by own savings or income but most likely from …..easy mortgaged lending that has been dried up beginning 2004 when Fed started its so call stepwise interest rate hike which has been handled cautiously in order that the Sub Prime Class would not be instantly hurt but it just delays the pain that soon has to come and very likely, the Property Bull is now bursting and as an ” Inflation Hawk”, I am sure Ben bernake would continue to raise rates so as to avoid the collapse of the USD as well as trying to lure FDI to buy into its Treasuries. Anyway, like would not be easy in the coming months ahead in 2006 as well as the coming years when there would be too many issues on hand that wouldbe hard nut to crack for Ben Bernake.
Steven Soh
We retire him and he still won’t go away. Holographic doubtful, stereographic perhaps.
Greenspan on Gold and Oil
The former Fed chairman has now fluttered the market with his pronouncements onGold. Barry has archived the article in his blog too.
Amidst all the paeans about the Maestro in January, I was reminded about Jim Rogers (unflattering…