It’s one thing for an ex-newspaper editor to engage in panic-for-publicity (see Alex’s post below), another for the ex-head of the US Federal Reserve to do the same.
But Alan Greenspan has done just that. Greenspan has mounted a major media offensive with three main messages.
First, you’re all screwed. Second, it didn’t happen on my watch. And third, buy my new book (he has a reported $8.5m advance to pay back).
Greenspan, who never mentioned the word bubble when leading the Fed, now expects single digit falls in the US housing market, but thinks a double digit collapse would be unsurprising.
He compares asset-backed securities to cocaine and describes the current crisis as a ‘disaster waiting to happen.’ Perhaps most interestingly, he predicts long-term upward pressure on inflation, as deflationary pressure from China eases off.
All in the all, though, the ex-Fed chairman comes across as one of those shy and retiring types who is desperately missing the limelight:
“Why am I penalised for effectively coming out of government? Do I abandon my profession? What do I do? I understand that [my statements have a market impact], and that’s the reason why when I speak in public I don’t talk about monetary policy. I do talk about the economy.
“Do I become an anthropologist? I don’t know what to do about this. It’s like putting me in jail. I didn’t do anything!” But while he remains fascinated by the goings-on at the Fed, he harbours no desire to be back there in the driving seat.
“I spent a considerable time there. I learnt a great deal, I enjoyed working with the people, but I’m really more a private economist. I’m essentially introverted, and being out in the open the way I became was very disconcerting to me. I’m a private person.”
