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GreenSpeak ....

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posted on Mar, 14 2004 @ 10:32 AM
Well the 'Fed', Federal Reserve Chairman Alan Greenspan, is anything but clear in his reports and comments to the public or the US government, when related to the current and future economic outlook.

Quite often his words need a bit of insight or creative reasoning by the reader to make any clear decisions based on his comments.

Surely this is to prevent the view of giving clue's which could be used to make a profit, or in extreme events, prevent the impression of swinging the markets by his statements.

Remember the Bubble? He spoke many times of 'Irrational Exuberance', and inflated markets.
Many people did not heed his words, and were burned at the end of the Clinton administration, by the collapse of the economy in general.

Since then he has worked 'with' the US gov., to assist in stabilizing the economy and bringing forth a controlled recovery. Repetetive lowering of the Prime Rate to keep the money circulating freely to where it stands now, a record low of 1%. Somewhere in the middle of it all, the 'Strong Dollar' program has all but been forgotten, as it is no longer the fact.

So where are we going now?...lets read the 'Feds' latest comments.....

On wages and skilled workers...
Greenspan Urges More Worker Education
BOSTON (AP) -- The United States needs to better educate its workers and avoid the trappings of protectionism to fully flourish in a global economy, Federal Reserve Chairman Alan Greenspan said Friday.
While trade barriers might slow the frenetic, sometimes troubling pace of competition, "our standard of living would soon begin to stagnate and perhaps even decline as a consequence," Greenspan said at a finance conference at Boston College.
Greenspan noted that while wages for high-skill workers have risen, real wages for low-skill workers have been stagnant for 20 years, suggesting the country is producing a shortage of high-skill workers and a surplus of low-skill ones.

On Social Security...
Fed Chief: Jobs Will Increase Soon
"We do not have enough in real resources to meet the promises that have already been made. We will not be able to fully meet the benefits to the next generation, the baby boomers that are retiring," Greenspan said.
"We have to construct a pattern that the benefits we do promise will be delivered rather than have these people retire in very large numbers and find out that they were betrayed by government ," Greenspan said.

On the economy,...
Budget deficits a risk to low interest rates, Greenspan says
Federal Reserve chairman Alan Greenspan took issue with the White House view that rising budget deficits pose little near-term threat to the climate of low interest rates that the US economy enjoys.
The deficit could, he said, "put substantial pressure" on the nation's ability in coming years to provide "even minimal government services" while maintaining such programs as Social Security and Medicare "without debilitating increases" in taxes.
He also had a stark warning about potential near-term impacts of a federal deficit projected at $521 billion this year: If investors doubt Congress's ability to tame expenditures, "an appreciable backup in long-term interest rates is possible."

Greenspan's last testimony,...
Hike in interest rates.. Greenspan to be patient
The recent performance of inflation has been especially notable in view of the substantial depreciation of the dollar in 2003. Against a broad basket of currencies of our trading partners, the foreign exchange value of the U.S. dollar has declined about 13 percent from its peak in early 2002. Ordinarily, currency depreciation is accompanied by a rise in dollar prices of imported goods and services, because foreign exporters endeavor to avoid experiencing price declines in their own currencies, which would otherwise result from the fall in the foreign exchange value of the dollar. Reflecting the swing from dollar appreciation to dollar depreciation , the dollar prices of goods and services imported into the United States have begun to rise after declining on balance for several years, but the turnaround to date has been mild. Apparently, foreign exporters have been willing to absorb some of the price decline measured in their own currencies and the consequent squeeze on profit margins it entails.
Part of exporters' losses, however, have apparently been offset by short forward positions against the dollar in foreign exchange markets. A marked increase in foreign exchange derivative trading, especially in dollar-euro , is consistent with significant hedging of exports to the United States and to other markets that use currencies tied to the U.S. dollar. However, most contracts are short-term because long-term hedging is expensive. Thus, although hedging may delay the adjustment, it cannot eliminate the consequences of exchange rate change.

But the evidence indicates clearly that such a policy stance will not be compatible indefinitely with price stability and sustainable growth; the real federal funds rate will eventually need to rise toward a more neutral level.

Moreover, some governments have accumulated large amounts of dollar-denominated debt as a byproduct of resisting upward exchange rate adjustment.

Nonetheless, given the already-substantial accumulation of dollar-denominated debt, foreign investors, both private and official, may become less willing to absorb ever-growing claims on U.S. residents. Taking steps to increase our national saving through fiscal action to lower federal budget deficits would help diminish the risks that a further reduction in the rate of purchase of dollar assets by foreign investors could severely crimp the business investment that is crucial for our long-term growth.

Well, I am no wizard in seeing the future, but I do watch and listen to the money. I have long ago stopped listening to the US government reports on the economy, as it commonly seems to be designed from postulations, or infrences, on the party in charge.

Granted GreenSpeak is hard to translate, it is becoming clearer to me he is giving clue's of our current direction.

And since he is in fact the man the money is controlled by, I can only try to recall any time he has been misleading.

I know we have all heard about the 'recovery' and the 'increases' in corporate productivity,
but have you looked at the whole international picture?

Final note,...US Budget deficit tops 500 Billion, for one year !
U.S. Current Account Deficit Swells
WASHINGTON (AP) -- The deficit in the broadest measure of trade swelled to a record $541.8 billion in 2003 , according to a government report that comes as trade and the loss of jobs have become major issues in the presidential campaign.
The latest snapshot of trade activity released by the Commerce Department on Friday showed that the "current account" deficit last year was 12.7 percent bigger than the previous all-time high deficit of $480.9 billion in 2002.


[Edited on 14-3-2004 by smirkley]

posted on Mar, 14 2004 @ 11:35 AM
Well, I'll give it a try,...

Short of the US government stopping it's practice of spending money like Mike Tyson,

Increased interest rates,
decreased international investment,
decreased US gov programs, and/or
increase in taxes,
increase in low-skill employment,
decrease in skilled employment, (maybe why corps are so willing to outsource)
baby boomers getting the Social Security Shaft,

basically a dismal outlook, pending the current direction.

An interesting comment extracted from the Fed's testimony...

Nonetheless, given the already-substantial accumulation of dollar-denominated debt, foreign investors, both private and official, may become less willing to absorb ever-growing claims on U.S. residents.

I just find that statement containing a very unique choice of words, many ways to read into that one ! (one way is spooky indeed !)



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