Notice Greenspan is making comments again, not sure he approves of Bernanke's threats to raise rates again?? or his current leadership at the fed.

Personally I think this guy better shape up quick as he causing most of the turbulence with his mixed messages and keeping evrybody dangling on a string, wouldn't surprise me, conspiracy theory again if he isn't doing this deliberately!!


WASHINGTON (AP) -- Former Federal Reserve Chairman Alan Greenspan said Wednesday that while the country has been able to absorb sharp increases in oil prices, the high energy costs are beginning to stunt economic growthBut he also said that sharply higher oil prices have not produced any "serious erosion" of world economic activity.

"The United States, especially, has been able to absorb the huge implicit tax of rising oil prices so far," Greenspan told a Senate hearing in his first appearance before Congress since leaving the Federal Reserve.

"However, he added, "recent data indicate we may finally be experiencing some impact."

Greenspan said the high oil prices, exceeding $70 a barrel resulting in gasoline costs to sore beyond $3 a gallon, are due to a sharp decline in spare global oil production capacity, refinery shortages and to some extent market speculation.

He said that American business "to date has largely succeeded in finding productivity improvements that have contained energy costs." But he said consumers "are struggling with rising gasoline prices."

Greenspan, appearing before the Senate Foreign Relations Committee, said he saw little chance that the narrow gap between global oil supply and demand will expand anytime soon.

But he said "current oil prices over time should lower to some extent our worrisome dependence on petroleum" with the development of alternative fuels and broader use of electric-hybrid cars. This "would help to wean us of our petroleum dependence," Greenspan said.

He said the United States has been able to "absorb the huge impact of rising oil prices with little consequences to date because it has become far more flexible" over the past three decades because of less regulation and globalization.

But he warned against import or price restrictions or other interference in the market.

"Growing protectionism would undermine that flexibility and make our nation increasingly vulnerable to the vagaries of the oil market," he said

I just dont see the sense in tightening further on interest rates, which is why I think we'll push on from here and hit 12000 on the dow in mid July, now theres wishfull thinking??

I'm getting set to go long and add with a re-crossing of 11000!!!

HLYeo, interesting point. You remind me of the fact that under Clinton, the US were getting out of debt nicely. Bush has the whole country more in hock than ever before. Not clever, IMO, and it will be interesting (i.e. potentially horrifying) to see what the evental fallout from that could be.

Time to take a big long position in concrete bunkers and tinned food ?? :o)

Ellio, I'm not an expert, but that sounds risky.

Well, soultraders, let us look at what Mr Bernanke has in store for us this week...if he gives more negative outlook, it looks like the whole US economy will be sinking with him and Mr Bush. And the Democrats will be back in!

It could be "interesting times" ahead, HLYeo.