Greenspan: Bernanke is out of bullets, now inflation is the big risk

[The Northerner]

Last week Meredith Whitney declared that the government is out of bullets, and now Alan Greenspan is saying the same thing about his old place of employment, The Fed.

Reuters: The U.S. Federal Reserve has done all it can do to reduce unemployment and needs to worry more about the risk of inflation from the stimulus it poured into the economy, former Fed Chairman Alan Greenspan said on Sunday.

"I think the Fed has done an extraordinary job and it's done a huge amount (to bolster employment). There's just so much monetary policy and the central bank can do. And I think they've gone to their limits, at this particular stage," Greenspan said on NBC's "Meet the Press."

Remember: this is a guy who knows his bullets, having fired them early and often at ever opportunity during his tenure at the Fed.

He's probably right, though if anything he's understating things a bit. The Fed, with its quantiative easing and massive expansion of the Fed's balance sheet has already gone far beyond what many regard as safe.

Even if the Fed's activites haven't been dangerous and bubble-making, we should hope that the economy can somehow organically from here. If we're still at the point where it's on Bernanke to do the job, we're screwed, especially in light of the higher Fed funding costs looming on the horizon...

Source: http://www.businessinsider.com/greenspan-bernanke-is-out-of-bullets-here-comes-inflation-2009-12

[pnwmom]

1. Sorry, Greenspan, you've got ZERO credibility. n/t

[girl gone mad]

8. He regained a small amount of credibility with me..

when he admitted that his objectivist/libertarian ideas had failed.

He's one of the only people who had a hand in the collapse that has expressed any remorse or personal failure.

[pnwmom]

9. He lost it all with me when he let Bush get away with those budget wrecking

tax cuts.

He only cares about deficits and inflation when a Democrat's in office.

[msongs]

2. banks charge 30%, payout only 0.2% on savings. I wonder who's making out ok? nt

[doc03]

5. I heard on CNBC the banks are whining that

people are not putting money in bank accounts!!! I wonder why?

[Craftsman]

3. It is only a matter of time with the expansion of the money supply being what it is

Suggest we all stock up on food stuffs because the prices are going up

[leveymg]

4. The only employment the Fed has bolstered is job security for bankers.

This article is a heaping pile of erroneous conclusions piled on layers of false assumptions. All except for one thing: inflation is inevitable, but it won't be because of any belated federal jobs program that is now too little, too late.

[IrateCitizen]

6. OK, then. I'm predicting deflation.

Not that I'm an economist of any real sort, mind you. I've just been an observer of events long enough to know that whenever Alan Greenspan says something, the surest way to be correct is to go with the exact opposite of what he says.

[wuvuj]

7. Hussman expects deflation for 2 years or so....

...also expects a double dip and a resumption of the bear....sort of hope he's not right. But I'd say inflation is in the cards...eventually.

I think eventually monetary inflation combined with resource scarcity as China and India ramp things up. Gonna hurt bad...especially when the US is in the debt hole we've dug...and jobs shipped out?

How did we get here? US leadership is either incompetent or corrupt...probably both.

...............................................

....here's Greenie!

[IrateCitizen]

11. I think that inflation is likely in the short-term, followed by deflation in the longer-term

The fact that there are between $500 trillion and $1 quadrillion (or more) worth of global derivatives sitting out there that need to eventually unwind all of their illusory wealth not backed by any productive assets sets the stage for deflation in the longer term. The Fed's printing operations will probably drive down the value of the dollar in the short term and thus pushing inflation, but I don't think that they can come close to printing enough money to cover all of the bad bets still stinking up the balance sheets.

But, that's just my opinion based upon the views I've read to this point, and that and $1.25 will get me a cup of coffee.

[wuvuj]

13. I'm thinking that they are trying...

...to make things seem "all better" so that the derivative bets cause less of a hit as they unwind. If they don't get them regulated and the rest marked to market again...eventually...then we're right back where we started?

Hussman and others think 1-2 yrs deflation...then the bad stuff starts. S&P/Zachs etc think we have a new bull market...3-4% GDP next 2 years...etc. Of course it's always up and away for Wall st.

Opinions reflect biases....Hussman is defensive...Wall St runs a casino....?

[pokercat999]

15. Geez, I think just the opposite, deflation for a few years

followed by rampant inflation. I'm sure this qualifies us to be MAJOR economists....you see, one of us is probably right, or we're both a little right or we're both mostly right....shit, I think we're MAJOR fucking economists!!!!!!!!

Now where do we get those Bernanke/Greenspan bucks? I'm telling you right now we could just plain guess and be right as much as these two numb nuts.

[pokercat999]

16. Geez, I think just the opposite, deflation for a few years

followed by rampant inflation. I'm sure this qualifies us to be MAJOR economists....you see, one of us is probably right, or we're both a little right or we're both mostly right....shit, I think we're MAJOR fucking economists!!!!!!!!

Now where do we get those Bernanke/Greenspan bucks? I'm telling you right now we could just plain guess and be right as much as these two numb nuts.

[RoyGBiv]

10. Okay, Bernanke, here's your chance ...

Father Greenspan has opined, which gives you an opening.

You now have the choice of following the advice of the person whose policies helped define this mess and whose almost every prediction has proved wrong.

Or, you can take that advice, whittle it down to its essentials, and figure out whatever the exact opposite of that is and do that.

What do you do? What DO you do?

[roamer65]

12. The Fed is nowhere near done.

They control money creation and they will take the M1 money supply MUCH higher. Mark my words. They have no choice.

[Odin2005]

14. Typical Libertarian inflation hysteria. STFU, Greenshit.