Well that settles that
Alan Greenspan, via Reuters:
Greenspan also said a boom in oil prices, which hit a record of $101.32 on Wednesday, will “go on forever.”
Greenspan was speaking in Saudi Arabia, by the way. Why are we always reminded (and not in a good way) of Irving Fisher’s “permanently high plateau” in prices when we hear such things?
Addendum: Greenspan also predicted a “dramatic contraction” in the Chinese stock market in the middle of last year. After that prediction, the Shanghai exchange promptly soared to new heights, and, as of this writing, it is trading a little higher than when the former Fed chairman spoke.
February 25th, 2008 at 11:47 am
I read an interview with T. Boone Pickens (at newsmax?) last week. While he thought oil would be lower in the next few months, he was guessing $150 oil in 2 yrs. What would that make gasoline? $4.50/gal?
February 25th, 2008 at 1:07 pm
If Alberta tar sands are economical at way under $50/bbl, this simply makes no sense.
Prediction: Canada will be an economic powerhouse in a decade. Canadians will still be coming to the US for medical treatment rationed by their government. We will still be turning $2 worth of food into $1 worth of energy thanks to “government subsidies” for ethanol.
February 26th, 2008 at 1:42 am
Greenspan gives us yet another example of why former FED Chairmen HAD a tradition of not making public statements about the economy after they left office (so they would not put their feet in their mouths and discredit the current office holder and the office itself ) He should be ashamed of himself.
February 26th, 2008 at 4:55 pm
I’ve been inclined to defend Greenspan but, like terrence, I strongly disapprove of his visibility after leaving office. It’s not clear how much of the fault lies with Greenspan and how much with the media.
One way or the other, it’s too soon to grade his performance at the Fed.
Per Jack, Greenspan had said of Chinese stocks, “There’s going to be a dramatic contraction at some point.” (Italics mine.) The Chinese market dropped more than 30% in less than five months–but that might not be dramatic by emerging-market standards.
As long as insider buying of US stocks remains robust, it’s hard for me to favor Greenspan’s scenarios of prolonged stagnation or recession.