Greenspan Fears Imminent Stagflationary Slump, Warns The Bubble Is In Bonds Not Stocks
by Tyler Durden
ZeroHedge.com
Aug 1, 2017
Former Fed chair Alan Greenspan blasphemously warned a year ago of an “imminent crisis”:
“This is the worst period, I recall since I’ve been in public service. There’s nothing like it, including the crisis – remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I’d love to find something positive to say.”
Adding that fundamentally it is not so much an issue of immigration, or even economics, but unsustainable welfare spending, or as Greenspan puts it, “entitlements.”
The issue is essentially that entitlements are legal issues. They have nothing to do with economics. You reach a certain age or you are ill or something of that nature and you are entitled to certain expenditures out of the budget without any reference to how it’s going to be funded. Where the productivity levels are now, we are lucky to get something even close to two percent annual growth rate. That annual growth rate of two percent is not adequate to finance the existing needs.
I don’t know how it’s going to resolve, but there’s going to be a crisis.
The Rest…HERE
