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VIENNA (Reuters) - Former Federal Reserve Chairman Alan Greenspan and the government of President George W. Bush were to blame for the U.S. financial crisis, Nobel laureate economist Joseph Stiglitz said in a magazine interview.
"This man (Greenspan) has unfortunately made a lot of mistakes," said former World Bank chief economist Stiglitz, according to a preview of the interview to be published on Monday in profil magazine.
"His first one was to support all the tax cuts which were introduced under Bush -- they didn't stimulate the economy very much ... This task was then transferred more towards monetary policy, though then (Greenspan) created a flood of credits with low interest rates," Stiglitz was quoted as saying.
Stiglitz said Bush's government was also to blame.
"I reproach them, that the economy was not as resilient as it could have been due to the ongoing tax cuts and the huge costs incurred by the war in Iraq," he was quoted as saying.
He said it was a myth that Europe could decouple itself from the United States.
"Especially the weak dollar will continue to hit the European economy hard, because it will make it much harder to export," he said.
Drop dollar peg, ex-Fed chair tells Arabs.
Former Federal Reserve chairman Alan Greenspan said on Monday near-record Gulf Arab inflation would fall "significantly" if oil producers dropped their dollar pegs, in contradiction to Saudi policy. The pegs restrict the Gulf's ability to fight inflation by forcing them to shadow U.S. monetary policy at a time when the Fed is cutting rates to ward off recession and gulf economies are surging on a near fivefold jump in oil prices since 2002. Rifts are growing across the world's top oil-exporting region on how to tackle inflation which hit a 27-year peak of seven per cent in Saudi Arabia in January and a 19-year peak of 9.3 per cent in the United Arab Emirates in 2006, the most recent figure.
Alan Greenspan, the former chairman of the US central bank, or Fed, has said that inflation rates in Gulf states, which are reaching near record levels, would fall "significantly" if oil producers dropped their US dollar pegs.
Alan Greenspan has again exposed himself as a traitor working against the interests of the American people by urging Gulf states to abandon the dollar peg, a move that could result in financial chaos and an economic depression in America.
The dollar peg mandates Gulf nations to price their assets in U.S. dollars and follow U.S. monetary policy at a time when the Fed is cutting interest rates, a system that has produced a boom in oil revenues but led to high inflation as the dollar weakens.
"It [de-pegging] is probably the most useful thing that can be done to stop the increasing influence of foreign assets on the monetary system and therefore the monetary base which is basically the major force in inflationary pressures," Greenspan told the Abu Dhabi Corporate Leadership Forum yesterday.
"In the short term free floating ... will not fully dissipate inflationary pressure, although it would significantly do so," added Greenspan, giving a green light for Gulf states to drop the dollar peg.
According to Economist editor Pam Woodall, Greenspan's comments heralded the beginning of the end for the US dollar as the currency of choice for foreign exchange reserves.
"If Asian central banks hold today more than 80 per cent of the global foreign exchange reserves, which indicates the shift of the global economy domination towards Asia, it seems quite awkward that the UAE still maintains the peg of its currency to the US dollar," she told Gulf News.
Greenspan's zeal to destroy the dollar is evident in numerous public statements he has made predicting the replacement of the dollar with the Euro as the world reserve currency.
Originally posted by DJMessiah
reply to post by DimensionalDetective
Bush and Greenspan are not the ones to blame for the Crisis at hand. FDR is for helping to create the Federal Reserve, taking us off the gold standard and placing us on the fiat system, and for prolonging the problem of the Great Depression for the future generations.