Monday, February 25, 2008

Greenspan Gives us his Weekly Update

In his continuing stomping on Bernanke's ground (bad form to constantly point attention to yourself after leaving the job), Greenspan gives us his weekly update. Remember, Greenspan is actually an advocate of my stagflation thesis and "World of Shortage" thesis [Dec 17: Greenspan Jumping on my Stagflation Thesis] and his comments on crude oil (while one man's thoughts) are quite interesting. I have to give him credit on this call because most of the US economists including those at the Fed have believed that as the US slows, inflation will simply go away, as if the world revolves around the USA. Again, it's a very inward looking and dangerous view that is outdated. Once they realize this, and they have very little control over booming commodities (short of worldwide recession) I assume the panic begins when people realize just how little power they have over the inflation genie. But until then, we drink the Kool Aid.
  • U.S. economic growth has stalled and recovery may take longer than usual, former U.S. Federal Reserve chairman Alan Greenspan said on Monday.
  • "Growing globalisation of trade and the economy would facilitate the absorption of shocks in the U.S.," he said.
  • Greenspan also said a boom in oil prices, which hit a record of $101.32 on Wednesday, will "go on forever".
One day politicians will realize that helping to support the alternative energy industries is not pandering to "greenies", and something that will be mission critical. Maybe at crude $150.

Can crude go to $75-$80 again? Surely. $50? I doubt ever again.

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