Friday, January 16, 2004

by way of the excellent Avedon Carol,

Greenspan on the Titanic

"Ordinary Savers Drown, Not Us!

You have to listen to what they say when they are live on TV because the really important things they say are never repeated in the later bulletins.

So it was today, when Alan Greenspan, Chairman of the Federal Reserve spoke to his Central Bankers hosts in Berlin.

And when you listen to what they have to say, you have to understand the implications of what they are saying, the underlying meaning. (Rayelan is right - this is where the chocolate is hidden.)...

During a Q&A following his speech, Greenspan was asked about the dangers of an economic crash, the collapse of currencies and the risks of collapses in the banking sector in the modern deregulated world economy. This was in context of concerns about the weak dollar and the burgeoning US current account deficit.

Casual and relaxed, almost in slow motion, Greenspan explained how deregulation had allowed the formation of a complex deriviatives sector in which risks to banks could be spread across borders and to pension funds and insurers. "Not one bank has collapsed under this deregulated system," he gloated from the bridge, hands firmly on the wheel as he peered with his watery eyes at the darkness.

He explained just how the risks had been farmed out to pension funds and insurance funds. They had taken the brunt, not the banks.

Note: "Greenspan on the Titanic" from Rumor Mill News.
(see link above.)