Greenspan Calls Treasury Yields ‘Canary in the Mine’
Former Federal Reserve Chairman Alan Greenspan said the recent rise in Treasury yields represents a “canary in the mine” that may signal further gains in interest rates... Higher yields reflect investor concerns over "this huge overhang of federal debt which we have never seen before," Greenspan said... "I’m very much concerned about the fiscal situation... [An increase in interest rates would] make the housing recovery very difficult to implement and put a dampening on capital investment as well."
...The U.S. budget deficit reached a record $1.4 trillion for the fiscal year that ended Sept. 30 amid falling tax revenue from the recession, a bailout of the banking and auto industries, and the $787 billion economic stimulus package.
"I don’t like American politics and what’s happening," Greenspan said... Historically, there has been "a large buffer between the level of our federal debt and our capacity to borrow... That’s narrowing. And I’m finding it very difficult to look into the future and not worry about that."
Democrats have proposed adding a value-added (VAT) tax to further extract money from the economy, presumably to emulate the petrified economies of Europe. Greenspan suggested that even a VAT tax wouldn't suffice.
Put simply, the problem is that the government isn't controlling its spending.
Everything Obama's doing is obvious: implementing a value-added tax, throwing sludge into the economy, transforming the society, rejecting the limits in the Constitution, cramming liberal activists throughout the judiciary, massively expanding the federal bureaucracy, and moving rule-making power to unelected bureaucrats.
It's not change, it's not hope, it's a disaster.
Hat tips: Mark Levin and AGAHB.
That buffer would be sorely missed if we were to enter a serious international crisis that includes the full mobilization and deployment of our military. I guess that option is no longer wanted, and I guess this is obvious to everyone.
The world may be in for a rather large shock.
Why would ANYONE listen to a word Greenspan has to say about the current economic conditions? He, Rick Rubin, Larry Summers, and Hank Paulsen are the people who allowed this to happen in the first place.
This all was bound to happen due to the overspending and bailouts offered to the big players. But having no option the government had to take the harsh decision. The need of the hour is to look out for new avenues to fill the coffers once again instead of burdening the already burdened masses.
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