HOLD OR BLOCK YELLIN’S NOMINATION. DRAMA. ONE MAN WHO KNOWS THE PROCESS WELL IS ALAN GREENSPAN. HE CHAIRED THE FEDERAL RESERVE FROM 1987 TO 2006 AND HAS WRITTEN A NEW BOOK, “THE MATH AND THE TERRITORY, RISK, HUMAN NATURE AND THE FUTURE OF FORECASTING.” HE JOINS ME HERE IN WASHINGTON, D.C. WELCOME, SIR. THANKS FOR BEING HERE. SO RAND PAUL IS THREATSENING TO HOLD UP THE NOMINATION UNLESS HE GETS A VOTE ON THIS AUDIT THE FED BILL, DETAILING EVERYTHING THE FEDERAL RESERVE HAS DONE AND IS DOING. I KNOW YOU OPPOSE IT. YOU THINK THE FED NEEDS TO REMAIN INDEPENDENT. WHY SHOULD PEOPLE NOT KNOW WHAT THE FED HAS BEEN DOING?>>FIRST, LET ME JUST SAY ON THE ISSUE OF ACCOUNTING, EACH OF THE 12 RESERVE BANKS ARE FULLY AUDITED, THE FEDERAL RESERVE BOARD IS FULLY AUDITED BY OUTSIDE ACCOUNTANTS. I’VE DONE A LOT OF ACCOUNTING OVER MY LIFE. I’M TELLING YOU THE BOOKS ARE AS CLEAN AS YOU CAN IMAGINE BECAUSE THERE’S VERY LITTLE THAT CAN GO WRONG THERE. THE ONE ISSUE THAT HE IS RAISING IS AUDITING THE ACTUAL DELIBERATIONS OF THE FEDERAL RESERVE WHICH IS A VERY BAD MISTAKE.>>WHY?>>BASICALLY BECAUSE WHAT HISTORY TELLS US IS IF YOU HAVE THAT SORT OF AUDIT BY THE POLITICAL SYSTEM WHICH IS OF COURSE WHAT IT IS, YOU WILL GET A BIAS TOWARDS INFLATIONARY MONETARY POLICY AND THAT’S THE REASON WHY THE ORIGINAL FOUNDERS OF THE FED MADE THE TERMS OF GOVERNORS 14 YEARS, FOR PRECISELY TO AVOID THAT REASON. SO IT IS A TERRIBLE IDEA.>>OKAY. LET’S TALK ABOUT YOUR BOOK. I KNOW THAT’S WHAT YOU WANT TO TALK ABOUT. I WANT TO GET TO WHAT’S INSIDE IN A SECOND BUT I READ A VERY HARSH REVIEW OF IT BY THE NEW REPUBLIC BY A LIBERAL PROGRESSIVE WRITER IN THE NEW REPUBLIC. I WANT TO GET YOUR RESPONSE TO IT BECAUSE HE REFLECTS A LOT OF FEELINGS, NEGATIVE FEELINGS, THAT MANY PROGRESSIVES HAVE ABOUT YOUR STEWARDSHIP OF THE FED. HE WRITES ANYONE WHO HAS PAID ATTENTION TO THE ECONOMY THE PAST FEW YEARS KNOWS HOW RIDICULOUS IT IS THE FED GREENSPAN, THE ARCHITECT OF THE POLICIES THAT LED TO THE GREAT RECESSION. HE SUGGESTS YOU SHARE THE BLAME WITH JPMORGAN CHASE FOR DUPING INVESTORS INTO PURCHASING MORTGAGE-BACKED SECURITIES THAT WERE STUFFED WITH GARBAGE LOANS BECAUSE YOUR QUOTE ALLERGY TO REGULATION AND UNSHAKEABLE BELIEF IN THE VIRTUES OF THE FREE MARKET LED YOU TO IGNORE THE BUBBLE AND ITS RISKS, INFUSING INVESTORS AND CONSUMERS WITH CONFIDENCE THAT THE RUN UP IN HOME PRICES WAS PERFECTLY NORMAL. HOW DO YOU RESPOND TO THAT?>>I RESPOND IN THE BOOK ITSELF. I EXPLAIN PRECISELY WHAT HAPPENED, WHAT LED TO THE GLOBAL BUBBLE. REMEMBER, THIS IS NOT AN AMERICAN BUBBLE. THE HOUSING BUBBLE LOOKS THE SAME WHETHER YOU’RE GOING TO CANADA, AUSTRALIA OR ANY OF 20 OTHER COUNTRIES. WE’RE SOMEWHERE IN THE MIDDLE. SO THE BUBBLE ITSELF IS NEITHER AN AMERICAN ISSUE NOR SOMETHING WHICH WE WERE UNAWARE OF. THE CRITICAL QUESTION THAT WE ALL MISSED IS WHEN IT WOULD BREAK AND ONE OF THE THINGS I DEMONSTRATE BASICALLY IN THE BOOK IS YOU CANNOT DETERMINE THAT. NOW, ESSENTIALLY, TO SAY WHAT THIS INDIVIDUAL SAID, ALL I CAN SUGGEST IS READ THE BOOK AND DETERMINE FOR YOURSELF WHAT YOU THINK.>>WELL, I DON’T WANT TO FOCUS ENTIRELY ON THE CRITICISM. I THINK ONE OF THE THINGS, THIS IS AN INVESTIGATION, YOU GO BACK AND LOOK AT WHAT YOU DID — WHAT COULD HAVE BEEN DONE DIFFERENTLY AND ONE OF THE THINGS YOU CONCLUDE IS THAT SPIRITS AS YOU CALL THEM, EXUBERANCE, DEPRESSION, ANXIETY, THAT THOSE THINGS PLAYED A BIGGER ROLE. DO YOU THINK THAT THEY PLAYED A BIGGER ROLE THAN, SAY, ABSENCE OF REGULATION, SUFFICIENT REGULATION ON WALL STREET?>>OH, ABSOLUTELY. THIS IS BASICALLY AN ENDEAVOR TO FIND OUT WHAT MAKES THE ECONOMY FUNCTION AND HOW BEST TO UNDERSTAND IT. WHAT THE ISSUE OF SPIRITS IS ALL ABOUT IS A CHANGE IN VIEW ON MY PART AND I PRESUME A NUMBER OF THE PEOPLE WHO ARE FORECASTERS, WHO MAKE A LIVING AT THAT, IS THAT IT’S NOT THAT WE WERE UNAWARE THERE WAS IRRATIONAL ACTIONS THAT PEOPLE ACTED CRAZILY. EYES WERE OPENED IN THE CANYONS OF WALL STREET. SO THAT’S NOT THE ISSUE. THE ISSUE IS FUNDAMENTALLY IS IT SYSTEMATIC ENOUGH TO ACTUALLY MODEL IT AND BE ABLE TO USE IT FOR FORECASTING PURPOSES. THE GENERAL PRESUMPTION OF MOST EVERYBODY WAS NO, NOT REALLY, BECAUSE IT’S RANDOM AND YOU CAN’T GET A FIX ON WHAT IS GOING ON. THE BIG SURPRISE TO ME IS I BEGAN TO LOOK AT THE REASONS WHY WE FAILED TO GET SEPTEMBER 15th, 2008, ON TIME — >>THE CRASH OF WALL STREET.>>THE HUGE — PEOPLE JUST DISAPPEARED. AND I WOULD SAY THAT THE MAJOR ISSUE THAT CONFRONTED US IS WE HADN’T A CLUE AS TO WHY THAT HAPPENED. THE PURPOSE OF THIS BOOK IS TO GO BACK TO SQUARE ONE AND TO SEE WHAT ESSENTIALLY WE DID WRONG AND WHAT IT TURNS OUT WE DID WRONG IS THAT THE FUNDAMENTAL PREMISE THAT PEOPLE ACT IN THEIR OWN RATIONAL SELF-INTEREST ALL THE TIME OF COURSE IS WRONG. WE KNEW THAT. BUT FAR MORE IMPORTANTLY, YOU CAN MODEL ANIMAL SPIRITS AND THAT MATTERS.>>THAT MATTERS FOR THE FUTURE PREDICTING.>>IT IS A HUGE ISSUE BECAUSE YOU’RE GOING FROM ONE TYPE OF SYSTEM TO LOOK AT THE ECONOMY TO A WHOLLY DIFFERENT ONE. AND THAT IS BASICALLY WHAT — THAT’S SORT OF A DETECTIVE STORY IN A WAY, HOW I PROCEEDED TO TRY TO FIND OUT WHY DID WE ALL MAKE THIS TERRIBLE MISTAKE.>>IT’S GETTING GREAT REVIEWS. WE WISH YOU THE BEST OF LUCK WITH IT. “THE MAP AND THE

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17 thoughts on “Alan Greenspan defends legacy”

  1. If we audit the fed it will result in a biased towards inflationary monetary policy? is that what he just said.

    What the hell does he think is happening right now. This man is a kook living in his own delusional reality.

  2. the world stands at a brink of something very big. Its going to effect all aspects of life… it begins with the secrecy that surrounds the fed and the monetary and economical infrastructure of the world. It's time for humans to wake up…

  3. Actually he IS.
    His easy-money policies were akin to feeding a child (ie Wall St,) lots of candy but not expecting it to grow fat, its teeth to not rot, etc.
    Now he says lots of BS when he KNOWS he, with full intent, pumped money into the economy to "stabilize" the business cycle. But he f'd up trying to be a god.
    In actuality, he added MORE instability to the system by introducing more variables that took on lives of their own & grew into insane monsters that still today rule the land. =-/

  4. You're right, but he is, too.
    If politicians get near the inner workings of the Fed, they'll pump money into the system to satisfy infantile voters who want absurd "fixes" to their financial woes.
    That action would more quickly ruin our economy.
    Right now we have hyperinflation held back because the money the Fed creates out of thin air is sitting in reserve accounts.
    The Fed by itself is crazy; add politicians in the mix, it would become absolutely schizo.
    Look how they mng taxes/debt now. =-/

  5. Greenspan knows he is the one responsible for what will be the worst economic collapse of our time.  He enabled private banks to gamble with leverage and when it blew up, the losses got shifted onto the rest of society. 

    The Federal Reserve exists only to ensure the monopoly of the private banking cartel that set it up at the expense of productive society.  Until it is done away with  along with this nefarious brand of crony capitalism, productive society is at grave risk.

  6.  I am not American so maybe I know nothing (in reality) about what is/was going on. But When he keeps referring to "We did not know what was going on" You are going to one (5.44) type of system to look at the economy to a different one" What is he talking of? Who is "You", is he talking about the American Nation (USA) or is he talking about the National Reserve Bank of The Jewnighted States of America. Sorry. But in reality I am told that the National Reserve is not an American State Bank owned by the whole country. Nor is it a Republican bank, owed by the people for the people. It is an independent bank with a Jewish Chairman and other Jewish interests. The world trade center owned and run by Jewish born parties. So when he is talking as if he is talking about the American Federal Reserve and the American Economy what and who is he really talking about? As an outsider I really can not make any sense of what he says. It is like he keeps calling a diamond a spade and a heart a club. So if I listened to him (or the Americans) I might bet on diamonds only to find that reality was that the winner was really hearts. But all the time the advice was bet on diamonds. Sorry-I don't want to sound anti Jewish. But it is like all we hear is Jewish problems, Jewish wars, Jewish run organisations suffering from mega financial problems and situations but all the time they are leaving hundreds of billions richer. When the whole deck of cards collapses they suddenly are the majority beneficiary's and all that is left for the rest is the dia problems of the catastrophic policy. Did the Federal Reserve ever have a policy the enrich the American population as a whole. I think not. I think it has always been self interest for the purposes of profiteering at the expense of those whom they supposedly help. Behind the generous smile is the true face of a board who realise that the more dia the financial crisis becomes thee more they can profit. Sorry but if America just paid the UK what it owed and we paid you what we owed you we would be about 47 billion pounds better off per-annum. But instead we have the absurd situation that economists supposedly high in both economy's keep advising the maintenance of the debt which incurs interest every year. So who gets all the interest? Let me guess. Is it the Federal Reserve. Not the American Public. Not the American public. They get increased taxes to pay for more economic disasters. So which economy is/was he talking about. Because some of the economies are going down the pan. Turning to crap and destined to be flushed away.

  7. Greenspan should be tried for treason and high crimes to humanity as well as the rest of the illegal foreign zionist fed

  8. shameful, why can't the people from the bush,reagan, dubya,the banksters, and greenspan and tony blairs of the world do the simple thing and just crawl under a rock and die? hide their heads and shame and kindly fuck off. its bad enough none of them go to jail for their crimes and stupidity but to come up with a new book of spin and bullshit is just nauseating.

  9. Greenspan should be locked up. He was the economy architect during the worst recession ever. He doesn't understand where he went wrong!

  10. "Why should people not know what the Fed's been doing?"

    In the words of George H. W. Bush: "If the people were to ever find out what we have done, we would be chased down the streets and lynched."

  11. Alan Greenspan, at last gets it right- with one foot in the
    grave, he will be pissed upon for as long as MEN THINK.
    *This is what he failed to do, he failed to think!!*
    *He blinked and replaced the Gold Standard with Fiat Money!!*
    *His one mission was to give reality to the Gold Standard!!*
    *His Legacy … is now fiat … kiss your arse goodbye!!*

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