Friday, February 18, 2011

Alan Greenspan - On "The Stock Market As A Stimulus"

Alan Greenspan gave an interview to The Wall Street Journal on January 7.  I found various parts to be of interest, and in many instances I disagree (partially or fully) with what he says.  I wrote a February 3 blog post on his comments in the interview concerning the primary purpose of a central bank.

Given the recent steep climb in the stock market, I think it is interesting to highlight his comments on the interaction between The Federal Reserve and the stock market.   While his entire thoughts on the issue are notable, I found his comment at the 16:24 mark to be, for a number of reasons, very provocative:
"...the stock market overall is the only type of stimulus that you can get in the economy which doesn't have any debt associated with it."

I'll likely further comment on this, as well as other recent comments made by Federal Reserve officials on the stock market, in a future post...

A Special Note concerning our economic situation is found here
SPX at 1339.26 as this post is written

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