Judas Greenspan crucified the U.S. economy
Question: Alan Greenspan has nothing to do with it Lee.
It’s the consumer who’s at fault. Joe and Jane Q Public have been buying on credit like drunken sailors for over a Year. (and this on top of car loans, student loans and 15 year mortgages) What you are seeing is a CONTRACTION of business, plain and simple. Now look out, Joe and Jane are in way past their heads and the spectre of layoffs are here. What happens now? Those wallets and purses slam SHUT and the whole thing snowballs. The FED can cut rates down to 1.0% in my opinion and it won’t make a hill of beans or a pimple on a (Republican?) elephants rear end. The farm has been mortgaged, the rent is due and the crops are all destroyed from a hailstorm and the barn burned down yesterday…capeesh ??
Answer: You may catch a bit of flack, but when all is said and done, you may not be far off the mark. Falling commodity prices can be the cat’s meow under to right conditions but those conditions are not what we are looking at today.
I for one, find the falling prices to more that a little bit troubling. A shrinking economy, once underway, can be a bear to turn around. I don’t think we’re looking at another ‘29 by any stretch, but the lack of response from both the 6 rate cuts and a hefty tax rebate leaves some cause for concern. it was the available labor number, not the Phillips curve, that he was looking at. Basically, the economy was creating X number of jobs a month while surveys indicated that the number of prospective employees was not much more than 2X, suggesting an imminent labor shortage. The Phillips curve was dismissed by the Fed long ago.
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