Greenspan: Monetary policy has done everything it can

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http://www.cnbc.com/2016/04/14/greenspan-productivity-profit-woes-are-political-problems.html

Former Fed Chairman Alan Greenspan said Thursday that monetary policy has reached the outward bounds of its effectiveness without another round of quantitative easing.

“Monetary policy … has done everything it can unless you want to put additional QEs on. They’re not helping that much in the sense that ultimately determines whether or not you’re getting an effect from the QEs” beyond increasing price-to-earnings ratios in the stock market, he said during an interview on CNBC’s “Squawk Alley.”

“There’s no real evidence that we’re getting an impact on lending and on the economy picking up,” he said.

Greenspan said he disagreed with International Monetary Fund Managing Director Christine Lagarde that negative interest rates create a net positive impact. Lagarde offered the assessment earlier on “Squawk on the Street.”

Japanese and European policymakers have pushed some key rates into negative territory.

Negative interest rates “hurt in the sense that financial intermediaries require positive interest rates, but I wouldn’t blame it on the negative interest rates, I’d blame it on the policies that got us to where we are,” Greenspan said.

Anemic productivity growth and flagging corporate profits can be traced to too much entitlement spending as the world’s population ages, Greenspan added.

“If you look at it in a bookkeeping sense, it’s because gross domestic savings, everywhere across the spectrum — the political spectrum — has been severely undercut by social benefit increases in virtually every single major country,” he said.

“It’s fundamentally … a political problem,” he said.

Greenspan said he believed that problem could have been solved in the United States had Congress taken up the fiscal policies put forward by Alan Simpson and Erskine Bowles in 2010. The bipartisan plan created “a very clever way of controlling the deficit,” he said.

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“Greenspan said he disagreed with International Monetary Fund Managing Director Christine Lagarde that negative interest rates create a net positive impact. Lagarde offered the assessment earlier on “Squawk on the Street.””

i think i agree..somebody shoot me..

401

~ by seeker401 on April 27, 2016.

6 Responses to “Greenspan: Monetary policy has done everything it can”

  1. You gotta love how they bring in the original planners of the destruction of the economy to be the critics when they have stolen as much as their filthy pockets can hold. Another ‘mission accomplished’ it would seem!

  2. Thing is we have had a lot of negative rates in the past when inflation exceeded savers returns . Eg I always said I was paid by the lender to take out my mortgage at 6% in the 80’s .
    Since the inflation at over 10% diminished the loan , made my wages rise and the house was going up at over 10% a year in value – so you had a negative “real” rate .
    It was a win win win situation but it must depend on having a job to pay the mortgage .

  3. “Anemic productivity growth and flagging corporate profits can be traced to too much entitlement spending as the world’s population ages, Greenspan added.”
    So let me get this straight…Greenspan is suggesting that companies should welsh on the agreements they made with former employees, so the companies profits can go…where?
    God knows they are not spending a dime on modernizing or maintaining their corporate industrial facilities, and they haven’t given current workers a reasonable raise in wages since about the 80’s, so Greenspan must be suggesting these corporations welsh on their obligations to former employees in order to dump even MORE shekels into the pockest of the shareholders and CEO’s that are already drowning in a deluge of shekels.
    By keeping all this wealth in the hands of the greedy & self-serving, how can you possibly stimulate the economies of the world?
    At least people with a company pension go out and spend it…the filthy (and I mean PIG-filthy) rich do not put their shekels into circulation, at least not to the extent that millions of people paying for necessities do.

    Greenspan, the hook in your nose is getting in the way of your foresight…

    • This very thing has happened with BHS – it was bought originally for its pension scheme to be milked for 500 million and the rest sucked dry – by using associate companies – basically asset stripped from under the shareholders noses – and workers noses .
      Robert Maxwell did the same .
      “Sir” Green should be forced to make up the deficit

    • “shekels”..spot on!

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