Sjeltur

From: Telegraaf.

Former Federal Reserve chairman Alan Greenspan said Sunday in ABC’s ‘This Week’ the US credit squeeze is developing into a “once-in-a-century” financial crisis. Greenspan made his comment after the news broke that a major bank in the US, Lehman Brothers, set file for bankruptcy and the decision of several US banks together to create a 70 billion dollar emergency fund for troubled banks in the future.

Talking about the new developments Greenspan said that the situation “is in the process of outstripping anything I’ve seen, and it still is not resolved and it still has a way to go.”

“I can’t believe we could have a once-in-a-century type of financial crisis without a significant impact on the real economy globally, and I think that indeed is what is in the process of occurring,” he said. His comment on the suggestion that declining prices of oil and food may help to avert a recession: “I wouldn’t put my money on it”.

Greenspan was chairman of the Fed from 1987 to 2006. According to many economists, Greenspan is at least partially to blame for the current crisis. His interest rate policy and the ever expanding money supply by the Fed played their part.

Whatever you think about Greenspan and his policies in the past, his comments are yet another strong signal there’s really rough weather ahead for the US economy, with unavoidable negative effects on the world economy. We are on the verge witnessing the biggest transfer of wealth in history, those who store their wealth in paper (including, and probably especially, the US dollar) are about to lose it.