Greenspan says natural gas prices are a threatTranslation: We're running out of natural gas in the United States, and Canada is unable to meet our demand. Thus, we will lose jobs as companies relocate to where the natural gas is cheaper. Thus, as we lose jobs and households are having a sharp hike in the price of heating and cooling, consumer spending will reduce and further deflate the economy.
Mr. Greenspan has managed to keep deflation at bay by lowering interest rates and thus stimulating the real economy through housing and real estate, but he has about reached the minimum level he can reduce the interest rates. His so-called "other options" have not yet been revealed, but he had better find a way to get more money printed into the real economy, rather than into the hyperreal financial system that rarely "trickles" down effectively to the real economy of the rest of us. I wonder if Greenspan acknowledges the misallocation and waste between the financial systems and the real economy, or if he is in Wall-Street la-la land and believes that investing in Wall Street actually results in the efficient production of real goods and services in the real economy?
As long as the price of energy continues to rise because of reduced supply, our money supply will shrink. Bad for us, good for oil barons. Too bad for us that the country is currently being led by the oil barons.
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