Alan Greenspan spoke today at the Council on Foreign Relations in New York, and he is not exactly the biggest bull. On the stimulus, the crypt keeper says the obvious: it is not working as well as expected. He even argued that government stimulus has crowded out private investment.
Elsewhere, Greenspan noted that it will take another year or so to reduce the housing inventory overhang. The surge in corporate profits is not helping investment levels. Greenspan believes that the most effective stimulus today would be rising stock prices.
This seems to be a shift, but Greenspan is saying he would support higher taxes to lower government deficits. He also concurs with Warren Buffett because he said that the chances of a double dip recession are heading lower.
Greenspan has also noted that the price surge in gold is a worry for currency markets, and gold is still the ultimate means of payment.
The saga continues…
JON C. OGG