This will be my last Easy Al post for the foreseeable future (you can see yesterday’s Greenspan Media Blitz! here)
From yesterday’s Guardian, comes this story on former Fed Chair Alan Greenspan: Greenspan: era of low inflation is over:
Britain faces the prospect of falling house prices and rising inflation within a few years, according to Alan Greenspan, the former chairman of the Federal Reserve.
In a series of interviews to promote his memoirs, the respected US economist warned that the era of low inflation was over.
He predicted that the Bank of England would struggle to keep the consumer prices index within one percentage point of the government’s 2% target . . .
"That’s going to change, because markets are going to start turning round and inflationary pressures are going to start to build," warned Mr Greenspan.
I am compelled to point out the painfully obvious: We have enjoyed an ever-decreasing low interest rate environment, ever since Paul Volcker, the cigar chomping, tough guy, was Fed chairman. He had the colossal cojones to break inflation’s back through a series of unbelievably painful rate hikes.
Amazingly, the man who stood 180 degrees to Volcker, the architect of a Fed policy which saw liquidity as the answer to any crisis, who single-handedly did more to promote, provoke and manufacture inflation, is now predicting that the era of low inflation is over. Go figure.
Does anyone else see the irony of this . . . ?
Greenspan: era of low inflation is over
Graeme Wearden and Ashley Seager
Guardian Unlimited, Monday September 17, 2007