Adventure Capitalist [Archive] - Ron Paul Forums / Liberty Forest

fletcher

05-11-2009, 08:38 PM

I just finished listening to this. It was pretty interesting. What was amazing was that although this book was written in 2003, Rogers was still able to spot the housing bubble created by the Fed. Pretty impressive.

“Greenspan has a long history of failure, that is why he has a government job. Almost immediately after he became chairmen of the Federal Reserve came the panic of 1987. The stock market went down about 20% in one day. Percentage wise, it was the biggest stock market collapse ever. Greenspan and his mutterings were part of the reason for the collapse. The week before, Greenspan had gone on and on about how the U.S. balance of trade was getting much better, and things were under control. Two days later, the balance of trade figures came out, and they were the worst in the history of the world. Right away, I and a lot of investors, especially internationally, realized ‘this guy is either a fool or a liar, he doesn’t have any idea what is going on.’ We now know Greenspan is no liar, he has never understood the stock market, he has never understood the economy. Cut to 1998 and Long Term Capital Management, a major fund which got into terrible trouble, losing billions of dollars. Its collapse was going to have an effect on a lot of Wall Street firms. The investment firms went crying to Greenspan. Instead of letting the company go under, and cleaning out the system as bare markets have done for centuries, Greenspan panicked, and put a lot of easy money into the system, bailing out his friends. That money is one of the things that led to the absolute worst of the mania, the bubble that has now burst with such devastating effect. Greenspan panicked again in 2001, that year the central Bank in the United States printed more money, on a percentage basis, than it has ever printed in the history of the Republic. Greenspan has been pumping money relentlessly into the economy, at the same time fiscal policy has been loose too. . .President Bush has been spending as fast as Greenspan can print. Both fiscally and monetarily, the world has been hit with a lot of money. ‘Well,’ Americans say to themselves, ‘things are not so bad off after-all.’ How long do you suppose that will last? The ‘maestro’ [Alan Greenspan] has now perpetrated a housing and consumption bubble, by driving down interest rates. Bubbles always end badly, and even more people will be hurt when this one bursts. The idea of central banks and central bankers as gods is a phenomenon of only the last decade in the West. Never before have they enjoyed the exalted status they enjoy now, where everybody knows the name of the head of the Central Bank in the United States, or the name of the chairmen of the Bank of England. This too will pass, if things get bad enough soon enough, we may abolish the Federal Reserve before it collapses. The United States has had three central banks in its history, the first two failed. This one, undoubtedly, will fail too.”