My new podcast episode is out.

Fox Business — There is no irrational exuberance in the market today, says Alan Greenspan

Short signal — by the man who missed the Global Financial Crisis?

Yahoo Finance
There is no irrational exuberance in the market today, says Alan Greenspan
Fox Business Videos

Ryan McMaken — Alan Greenspan Admits Ron Paul Was Right About Gold

AG: I view gold as the primary global currency.

OK, we got that cleared up.

Remember that Alan Greenspan said that central banks operate "as if" on a gold standard. He had also said that gold is the premier currency.

Mises Dailies

Alan Greenspan Admits Ron Paul Was Right About Gold
Ryan McMaken

Brad DeLong — Misdiagnosis of 2008 and the Fed

Alan Greenspan revisited.

WCEG — The Equitablog
Misdiagnosis of 2008 and the Fed: Inflation Targeting Was Not the Problem. An Unwillingness to Vaporize Asset Values Was Not the Problem…
Brad DeLong

Zero Hedge — Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard

This is not a joke. He really means it.

If the world listened to his advice, it would result in a Great Great Depression. aka the grandmother of all depressions.

Zero Hedge
Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard
Tyler Durden

David Dayen — Hillary Clinton Criticizes Donald Trump for One of the Few Things He Is Right About

DEFICIT HAWKS OFTEN raise the specter of hyperinflation to scare people who disagree with them. And that’s exactly what Hillary Clinton did on Tuesday.
Speaking in Columbus, Clinton criticized Donald Trump for saying last month that the U.S. can never default on its debt obligations “because you print the money.”
“We know what happened to countries that tried that in the past, like Germany in the ‘20s and Zimbabwe in the ‘90s,” Clinton said. “It drove inflation through the roof and crippled their economies.”

But printing money — otherwise known as increasing the money supply – is a routine occurrence for governments that control their own currency. The Federal Reserve has increased its balance sheet by over $3 trillion since the financial crisis, explicitly to support the economy. (The Fed does this by buying stocks and bonds with electronic cash that didn’t exist before.)

In fact, an increasingly influential school of economics, known as Modern Monetary Theory, argues that deficit spending, including through money printing, is critical to promote full employment.

Even Alan Greenspan, former chair of the Federal Reserve, echoed Trump’s comments almost verbatim back in 2011, when the U.S. came close to reaching the debt limit. “The United States can pay any debt it has because we can always print money to do that,” Greenspan told “Meet the Press.”…

Another reason not to vote for Hillary. She is a fiscal moron.

The Intercept

Hillary Clinton Criticizes Donald Trump for One of the Few Things He Is Right About

David Dayen

Zero Hedge — Greenspan Explains The Fed's Miserable Track Record: "We Didn't Forecast Better Because We Can't"

Letting the cat out of the bag.

Zero Hedge
Greenspan Explains The Fed's Miserable Track Record: "We Didn't Forecast Better Because We Can't"

Tyler Durden

Ramanan — J. W. Mason And Alan Greenspan On Monetary Policy

Links.

The Case of Concerted Action
J. W. Mason And Alan Greenspan On Monetary Policy

V. Ramanan

Brad DeLong — Alan Greenspan (1994): Testimony before the Subcommittee on Economic Growth and Credit Formation of the Committee on Banking, Finance and Urban Affairs

Greenspan is announcing that the Fed is no longer asking in a Friedmanite mode “do we have the right quantity of money?”, but rather asking in a Wicksellian mode “do we have the right configuration of interest rates”

WCEG — The Equitablog
Alan Greenspan (1994): Testimony before the Subcommittee on Economic Growth and Credit Formation of the Committee on Banking, Finance and Urban Affairs
Brad DeLong

Also

Cracking the Hard Shell of the Macroeconomic Knut: “Keynesian”, “Friedmanite”, and “Wicksellian” Epistemes in Macroeconomics

Brad DeLong — **Must-Read: What did Alan Greenspan do in 1987 when the stock market suddenly dropped by 25%? He reduced short-term safe nominal interest rates by 200 basis points.

The problem is that the global economy is on the cusp of the second leg down in the GFC. Central banks have already shot off their bazookas and it hasn't resulted in the expected recovery other than a very tepid one in the US, assisted by fiscal policy.

By and large neoliberal conservative forces are in power in most of the economies that count, which either means a preference for austerity or a bridle on stimulative fiscal policies. Conservatives now argue that austerity has not really been tried effectively and central banks need to tighten, fiscal policy needs to be more austere to become expansionary by forcing greater wage flexibility to get investment going — and everyone needs to export, export, export, even though that is impossible in a closed global economy. 

So we are standing on the brink of 1937, and while history doesn't repeat, we all know what happened after that. Let's hope history doesn't rhyme in this case.

Think fiscal, fiscal, fiscal. "It's the demand, stupid."

This is serious. If it is not handled correctly in a prompt way, a global debt deflationary spiral is in the cards and things begin to unravel. Which will be just fine with the liquidationists.

Grasping Reality
**Must-Read: What did Alan Greenspan do in 1987 when the stock market suddenly dropped by 25%? He reduced short-term safe nominal interest rates by 200 basis points.
Brad DeLong | Professor of Economics, UCAL Berkeley

Also

If the effects of the crash cannot be reversed with monetary policy, that leaves fiscal policy — that old, neglected, unpopular tool — to fight any breakouts of deflation or mass unemployment.

Or it leaves central banks to try really radical policies that emulate the directness of fiscal policy, like literally throwing money out of helicopters or OMFG. [Overt Money Financing]

Azizonomics
Correction or Crisis?

John Aziz

David Dayen — Greenspan Imagines Better, Alternate Universe in Which Greenspan Was Not Fed Chair

Alan Greenspan, the policy failure whose tenure at the Federal Reserve helped create the conditions for the largest financial crisis in nearly a century, was inexplicably given a major newspaper platform on Monday to opine about regulation, which he ideologically abhors.

So it came as a surprise to read the second paragraph of his Financial Times op-ed, wishfully describing an alternative history of 2008, if only there had been robust regulation.

“What the 2008 crisis exposed was a fragile underpinning of a highly leveraged financial system,” Greenspan writes. “Had bank capital been adequate and fraud statutes been more vigorously enforced, the crisis would very likely have been a financial episode of only passing consequence.”

Greenspan must have temporarily forgotten that he had the power to accomplish both of these priorities as Fed chair.

Before the Consumer Financial Protection Bureau, the Fed had primary responsibility over consumer protection, including rule-writing, supervision, and prohibition of unfair and deceptive practices. They even were charged with resolving consumer complaints.

Greenspan famously did none of this during the inflating of the housing bubble from 2002 to 2006, instead extolling the virtues of adjustable-rate loans and mortgage securitization, even as fellow Fed governors and the FBI publicly warned about looming fraud. The responsibility for vigorously enforcing fraud statutes, then, fell to Greenspan, and he ignored it.…

The wizard behind the veil has no clothes.

The Intercept
Greenspan Imagines Better, Alternate Universe in Which Greenspan Was Not Fed Chair
David Dayen

Bill McBride — Tenth Anniversary of Greenspan's "Froth" Testimony

 Lest we forget.

For fun ... tomorrow is the tenth anniversary of then Fed Chairman Alan Greenspan's "Froth" testimony on June 9, 2005:

Calculated Risk
Tenth Anniversary of Greenspan's "Froth" TestimonyBill McBride

Chris Christie is floating his big, "presidential," idea: Screwing seniors out of Social Security

Guess who's sorta running for president, but hasn't come out and said it, yet? New Jersey Governor, Christie Christie. And guess what appears to be the main idea for his platform? How he's gonna "fix" Social Security.

Never mind that it ain't broken and will never go broke because the Federal Government can never run out of dollars to pay. Alan Greenspan schooled Paul Ryan on this, remember? And the government "paid back" nearly $69 trillion to holders of public debt securities LAST YEAR. SIXTY NINE TRILLION.

So it's pretty clear we can't run out of money.

But don't let that phase Christie; he's just another clueless, callous debt fanatic. A guy who's pretty much run his state into the ground. Near last in job growth. Credit ratings cut by rating agencies. Led the last three years out of four in people leaving. Cuts to education, health care, social programs, but of course, tax cuts for the wealthy. He's right up there with guys like Sam Brownback of Kansas and Scott Walker of Wisconsin

Christie's plan to fix Social Security is to screw seniors out of benefits by cutting payments and raising the retirement age. Wonderful. More taxes on the most vulnerable and those who worked all their lives and contributed to the system and helped build the country. That's fair.

By the way, with Christie coming out with this plan, expect the other ignorant debt fanatics/hypocrites to do the same and, oh yeah, that means Hillary Clinton, too. Her husband is all about cutting Social Security. His "guy" was none other than Erskine Bowles of Simpleton/Bowels infamy.

All I have to say are two things: Are we still really having this discussion about what is causing income and wealth  inequality?

And...

Say goodbye to Social Security as we have come to know it. It's going away.

P.S. Guys ike Christie are truly disgusting.

Alan Greenspan — Gold & Economic Freedom

Published in Ayn Rand’s “Objectivist” newsletter in 1966, and reprinted in her book, Capitalism: The Unknown Ideal, in 1967.

Zero Hedge
Gold & Economic Freedom

Alan Greenspan

How on earth did this man become the chairman of the Board of Governors of the Federal Reserve System and serve five terms, appointed successively by Presidents Reagan, GWH Bush, Clinton, and GW Bush?

Of course, Greenspan was not the only central banker who was a gold fetishist.

It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less. By and large, if the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with ‘free banking.’ The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy. — Paul Volcker, Foreword to Marjorie Deane and Robert Pringle’s The Central Banks (Hamish Hamilton, 1994)

Central bankers hate inflation and love gold as a price anchor. As economists, they possess little creative imagination, lack systemic awareness, and have one track minds.

Mish — Greenspan and Gold

Tett: Do you think that gold is currently a good investment? 

Greenspan: Yes... Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.

Mish's Global Economic Trend Analysis
Reader Question on Greenspan and Gold: "No Fiat Currency Can Match It"
Mike Mish Shedlock

Jeff Cox — Wait till you see what Alan Greenspan's been saying

Good for some laughs.

CNBC NetNet
Wait till you see what Alan Greenspan's been saying
Jeff Cox | Finance Editor

Lars P. Syll’s — Foot-in-mouth disease — Ayn Rand and Alan Greenspan

The ironic thing is that Sitting Bull is an icon of the freedom that Ayn Rand and  her fanboy Alan Greenspan only fantasized about and the people that they believed to be capable of assuming that mantle could not when entrusted with the global economy. As Greenspan later admitted, they didn't have the right stuff. And he didn't either as chief regulator responsible for preserving and ensuring the stability of the financial order and banking system. Ayn Rand calling real men like Sitting Bull "savages" is way beyond moronic. And they were also much better philosophers than she aspired to be but never made the grade.

Lars P. Syll’s Blog
Foot-in-mouth disease — Ayn Rand and Alan GreenspanLars P. Syll | Professor, Malmo University

whoknu — The most important thing you will learn about Social Security today

MMT.

Job well done.

Daily Kos
The most important thing you will learn about Social Security today
whoknu

Marshall Auerback — The Financial Crisis Of 2008 Can Be Laid At The Door Of The Clinton Administration

The usual hagiography, particularly amongst Democrats, is that the US got seriously off track during the Bush (II) presidency after the golden years of prosperity under the Presidency of Bill Clinton. That myth has afflicted much policy making amongst the party today, notably within the Obama Administration, which hired a lot of the ex-Rubinites responsible for creating the mess.

And there’s a lot more evidence that has come out to support the view that Clinton’s crew truly was “the wrecking crew” when it came to dismantling many of the protections that had afforded much financial stability to the US for much of the post World War II era....

Macrobits by Marshall Auerback
The Financial Crisis Of 2008 Can Be Laid At The Door Of The Clinton Administration
Marshall Auerback

Peter Martin — Muddled Thinking Watch #1 “We will need decades of austerity not years” writes Phillip Booth in the Daily Telegraph

Its not a question of whether it “can be afforded” in money terms but whether “it can be afforded” in resource terms. Present commitments may or may not be able to be afforded at some future time. It will depend on the resources which will be available at that future time.

Alan Greenspan's response to Paul Ryan in congressional testimony: “Well, I wouldn’t say that the pay-as-you-go benefits are insecure, in the sense that there’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The question is, how do you set up a system which assures that the real assets are created which those benefits are employed to purchase.” 

Greenspan lays the smackdown on Paul Ryan

Modern Monetary Theory: Real Economics
Muddled Thinking Watch #1 “We will need decades of austerity not years” writes Phillip Booth in the Daily Telegraph
Peter Martin