Finger In The Dike
Richard Fisher, head of the Federal Reserve Bank of Dallas, said the following today:
Oh, and is anyone still wondering why crude oil was up $2.50 today?
On his last day at work a few months from now, Fed Chairman Alan Greenspan should leave a single piece of paper in the top drawer of this desk with four words of advice for his successor: "Après moi, le deluge."
Where would the world be if Americans did not live out their proclivity to consume everything that looks good, feels good, sounds good, tastes good? We provide a service for the rest of the world. If we were running a current account surplus or trade surplus, what would happen to economic growth worldwide and what would be the economic consequences? So I think we are doing our duty there.And there you have it. Apparently, it is not enough to have destroyed the saver class and with it an integral part of our national identity rooted in prudence and "saving something for a rainy day." The Federal Reserve has now anointed itself the official keeper of the flame of piggish, reckless consumption--quite a departure from its historical mandate to maintain both price stability and the maximum sustainable rate of employment. This is the equivalent of a doctor who starts his career treating drug addicts, and eventually winds up on the street passing out the dope. Fisher's comment only strengthens my belief that within the next few years the Federal Reserve as an institution will come under harsh scrutiny, and the public may be shocked by what's revealed.
Oh, and is anyone still wondering why crude oil was up $2.50 today?
On his last day at work a few months from now, Fed Chairman Alan Greenspan should leave a single piece of paper in the top drawer of this desk with four words of advice for his successor: "Après moi, le deluge."
posted by The Cunning Realist at Wednesday, June 01, 2005
22 Comments:
Just insane. What the hell happened to this country over the past few years?
and they'll keep spending...
When you owe the bank $100k and can't pay, you're in trouble.
When you owe the bank $100 mil and can't pay, the bank's in trouble.
Add a couple of zeros and the world is in trouble.
I am amazed that a Federal Reserve Bank president would actually say that.
The Federal Reserve like the SEC, the FCC the NIH, the CDC, etc., ad nauseum is an "arm" of the current White House.
Nothing amazing there.
And Wall Street plays no part in encouraging the consumption party to continue. And of course Wall Street, including the Insurance Industry, has been so straight and helpful when it comes to retirement planning. The plan appears to be sell the next product anyway you can and extract huge fees from average Americans that work hard and play by the rules and no longer can count on traditional defined benefit plans, among other things. Average Americans are locked in a life-and death struggle with the investment industry; whose entire purpose is to extra fees and commissions; not too mention the industry, operates at a level of educational, moral, and ethical imperatives that would be inconceivable in any other industry. (sorry)
The 401(k) is slightly over 20 years old and is a ticking social and financial time bomb that will be tested greatly in the next couple of decades.
I'm no fan of Greenspan, but I think there is plenty of blame to go around. As they say, if you aren't part of the solution, you are part of the problem.
It appears many Federal institutions or quasi-federal are under attack. And if not under attack they are financially uncertain, like the PBGC, Fannie Mae.
Business Week had an interesting article, "Uncle Sam: Up to his neck in the risk pool".
This is truly a confidence game at this point.
Fisher's comments are the type of thing that historians will cite 50 years from now to sum up this era.
I wonder about this a lot. I live frugally and benefit off other americans' wastefulness at thrift shops and yard sales. And the consumer culture is keeping the economy going. I often wonder what things would be like if americans were less wasteful.
good post by TCR.
No reason not to spend, spend, spend. If you run out of money, it isn't your fault. It is always someone else's fault. At least, this seems to be this generation's belief. Responsibility is "shared", not one specific person is to blame ........
No reason not to spend, spend, spend. If you run out of money, it isn't your fault. It is always someone else's fault. At least, this seems to be this generation's belief. Responsibility is "shared", not one specific person is to blame ........
Fisher asks where the world would be without it's best customer, the profligate American consumer? Could it be that they'd be developing their own domestic markets and finding markets in countries other than the U.S., diversifying themselves against the risk of a U.S. recession and encouraging the growth of their own middle class rather than the destruction of ours?
Oh, the humanity.....
Well what can you expect from our leaders? Our own moron president told us to "go shopping" to fight terrorism.
Cunning Realist, What's your opinion of Bush appointing Chris Cox to head the SEC?
What are people on Wall Street saying?
Does that mean we should thank them for buying our debt, even though Bush says it is worthless (in reference to Social Security trust fund treasuries)?
We went from a creditor to a debtor nation with Reagan. How come that is overlooked? This seems to have started the unraveling.
"tastes good" , like brioches ?
unsurprised
This country is like an addict. All it wants to do is consume, consume on credit with little thought on HOW TO PAY for it, just like this government. If a democratic president had presented these budget he would have been crucified by the republicans in congress and everywhere else. This country will find out sooner than later that the bill will come do with a VENGANCE and at a cost that will leave this nation at the mercy of the lenders and americans will not like the picture, but by that time it WILL BE TO LATE. We will be a military powerhouse, with a broken army, but with fancy military toys and bombs up to our noses, but economically DEAD BROKE. In addition we are so drunk with the illusion of being a world power and wrapping us in the american flag that nobody wants to see or hear that the president is wearing no cloth.
The internet in general had existed ten years ago. Yo have nice site, admin!
personal-injury-attorneys-greenville
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.
Take a look at Wallstreetwinnersonline.com
RickJ
Great article! Thanks.
Thanks for interesting article.
Excellent website. Good work. Very useful. I will bookmark!
Post a Comment
<< Home