Greenspan Predicts Long Recession For U.S.
Parsing this article about former Federal Reserve Chairman Alan Greenspan, I come away with the impression that Liquidity-G thinks the United States is going to enter a prolonged recessionary period.
Here is why:
The article starts out by saying:
Former U.S. Federal Reserve Chairman Alan Greenspan on Thursday said the U.S. economy is “clearly on the edge” of a recession.
Okay, so 1.) U.S. economy is “clearly” on the edge of recession. Or teetering between no growth and contraction.
The article then goes on to say:
Greenspan said the economy will continue to erode until there is a stabilization of U.S. housing prices.
So, according to the former FedHead, the U.S. economy is on the brink of entering a recession, and 2.) the economy will continue to deteriorate until housing prices stabilize.
Now here is the money shot:
“We have a long way to go” before housing prices hit a bottom, Greenspan told energy executives at the CERA conference.
3.) Housing prices have a much further to fall before hitting a bottom.
Now let’s work through the sequence again, backwards. Former Federal Reserve Chairman Sir Alan Greenspan believes housing prices “have a long way to go” before hitting bottom and the U.S. economy will continue to contract until housing prices stabilize, while the economy is “clearly on the edge of recession”.
So the economy is basically at a zero-growth now and will continue to get worse until housing prices stabilize, to which Greenspan thinks is a “long way” away from here.
It doesn’t get much more dire than that.
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