Alcazar is saluting the retiring Alcalde

Alcazar is saluting the retiring Alcalde

The Alcazar is saluting the retiring Alcalde. The master chemist of disquisition has been at the helm for almost 20 years, creating disquietude, while crocheting crinoline in the world's economic biome. His inevitably incomplete knowledge and cognitive dissonance has become the epergne of world wide recognition. His alchemy of a structured and stable economy for the un-informed masses, has created many economic precipices during his reign. The abundant liquidity in the housing market, the stock market, the bond market has caused ephemeral illusions of wealth. The croupier hesitancy and lack of resolve to solve the looming fiscal problems will reward those members at his table while causing others to join the exponentially growing class of bindle stiffs.


Here are some disturbing excepts from the master of creating disquietude.


“Given our inevitably incomplete knowledge about key structural aspects of an ever-changing economy and the sometimes asymmetric costs or benefits of particular outcomes, the paradigm on which we have settled has come to involve, at its core, crucial elements of risk management. “

“Such an increase in market value is too often viewed by market participants as structural and permanent. To some extent, those higher values may be reflecting the increased flexibility and resilience of our economy. But what they perceive as newly abundant liquidity can readily disappear. Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices. This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums.”

“Fear of change is also reflected in a hesitancy to face up to the difficult choices that will be required to resolve our looming fiscal problems.”

“If we can maintain an adequate degree of flexibility, some of America's economic imbalances, most notably the large current account deficit and the housing boom, can be rectified by adjustments in prices, interest rates, and exchange rates rather than through more-wrenching changes in output, incomes, and employment.”

“Whether the currently elevated level of the wealth-to-income ratio will be sustained in the longer run remains to be seen.”

Speech by Chairman Alan Greenspan
Reflections on central banking

God Bless
Doctrader