Saturday, November 20, 2004

Uncle Alan is back at it

Jude Wanniski, proponent of supply-side economics, periodically criticizes Fed Chairman, Alan Greenspan, for his failures in managing the economy. Here is the opening of a NY Time article that got Jude going today.

"Alan Greenspan came to the home of the euro on Friday and suggested that the relentless decline of the dollar might well continue, offering little relief to those here who worry that the United States is seeking to gain a competitive advantage for its industries from a weaker currency. In a speech to a banking congress here, Mr. Greenspan, the chairman of the Federal Reserve, said that ballooning foreign borrowing on the part of the United States poses a future risk to the dollar`s value. He said that foreign investors, who help finance the large American trade and budget deficits by buying Treasury securities and other dollar-denominated assets, would eventually resist lending more money to the United States, causing the dollar to fall further. When this news hit the wires Friday, the Dow Jones Industrials lost 115 points, the dollar fell sharply against the euro and the Japanese yen, the bond market sank, and the price of gold jumped to $448, up $5 an ounce."

Jude says: "Nice job, Alan" and goes on to explain how Greenspan is blaming everything but the real culprit -- Fed policy -- for the way the dollar's value whips around.

The fully formatted report and much more may be found at Supply Side University (

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