Market crisis 'will happen again' Greenspan

[abelenkpe2]

Yeah that's right. He's opened his mouth again.


Market crisis 'will happen again'


The world will suffer another financial crisis, former Federal Reserve chief Alan Greenspan has told the BBC.

"The crisis will happen again but it will be different," he told BBC Two's The Love of Money series.

He added that he had predicted the crash would come as a reaction to a long period of prosperity.

But while it may take time and be a difficult process, the global economy would eventually "get through it", Mr Greenspan added.

"They are all different, but they have one fundamental source," he said.

"That is the unquenchable capability of human beings when confronted with long periods of prosperity to presume that it will continue."

Speaking a year after the collapse of US investment bank Lehman Brothers, which was followed by a worldwide financial crisis and global recession, Mr Greenspan described the behaviour as "human nature".

He said the current crisis was triggered by the trade in US sub-prime mortgages - home loans given to people with bad credit histories - but he added that any factor could have been the catalyst.

If it were not the problem of these toxic debts "something sooner or later would have emerged", Mr Greenspan said.

(more at link)

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Enjoy!

[valerief]

1. Huh. And I thought it was the credit default swaps, the exponentially multiple bets that

the mortgages would fail.

[virgogal]

2. He's right,of course. Recessions come,recessions go,and then they come again.

[abelenkpe2]

6. True

But I still think he's got it all horribly wrong.

For instance this bit:


"We will have more crises and none of them will look like this because no two crises have anything in common"

Uh, baloney. Easy credit, housing bubbles, wall street unchecked, huge monopolies were all part of the recipe leading to the Great Depression and is embarrassingly similar to today.

He just doesn't want to own up to his own responsibility in this whole debacle.

[spotbird]

3. please link. nt

[lib2DaBone]

4. He's right.. all those toxic debts are still out there.. ready to explode.

Obama chose to give billions to the Bankster/Gangsters.. who then horded the TARP money while very little of the stimulus ever made it to street level.

Nothing has been done to help the unemployed middle class. (Unless you count the first $2,400 of unemployment benefits that won't be taxed..big deal... and that is if you are lucky enough to even receive any benefits)

In the meantime, outsourcing continues unabated - Whirlpool to move 1,500 jobs to Mexico - http://www.reuters.com/article/businessNews/idUSTRE57R36W20090828?feedType=RSS&feedName=businessNews, Chinese made junk continues to pour into the country with no competition.. at it is reported that $35 Trillion (with a "T") in derivatives are ready to go "Boom" on the world market.

I wish Obama would get rid of Rahm Emanuel, Geithner, Bernake (the whole bunch) and re-think what he is doing to um-employed and hungry Americans. (imho)

[abelenkpe2]

5. Ack! Link

http://news.bbc.co.uk/2/hi/business/8244600.stm

Sorry I thought I put that in....:blush:

[Bigmack]

7. With all this glib talk about the coming "recovery,"

I don't see ANY of those seemingly highly educated economists factoring in the economic consequences of the rapidly approaching energy crisis - peak oil, peak NG, and not to mention the looming climate crisis connected to burning fossil fuels..... NO ONE seems to be mentioning the connection between the ENTIRE global economy and relatively plentiful and cheap energy. Ms Bigmack

[abelenkpe2]

9. That's because global warming and peak oil are

liberal conspiracies.

:sarcasm:

[Hannah Bell]

8. greenspan = stfu. chief bubble enabler, funneler of $$ to the rich.

shill.

[notesdev]

10. This is INHERENT to fractional reserve banking

In a fractional reserve banking system, money is created (out of thin air) by the act of a financial institution making a loan.

Loans are made expecting a return of principal plus interest, and it is the interest that is the key element here. In order to pay that interest there must be more money in the future than there is in the present.

The problem is that at ANY rate of interest, the mathematics of compounding make it inevitable that we will reach the point where additional debt cannot be supported by income. But since money is created by making a loan - that is, the creation of debt - once no more debt can be created to cover the additional payments necessary to pay interest on the already-outstanding loans, the system must fail.

This is 8th-grade math, not some advanced financial wizardry calculations, and every person here is capable of understanding it. If the country as a whole came to understand it, the banker elites would be driven out of the country or hanged within days.