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Tags: alan greenspan | economy | entitlements | stock markets

Greenspan: Markets Undergoing 'Long-Overdue Adjustment'

Greenspan: Markets Undergoing 'Long-Overdue Adjustment'
Alan Greenspan

By    |   Monday, 14 September 2015 07:59 AM EDT

Alan Greenspan, former chairman of the Federal Reserve, warns that the U.S. stock market is undergoing a “long-overdue adjustment” and it’s “too soon to tell” if we are headed into a global economic crisis.

“The major problem is bubbles are not the issue at the moment. It's basically a long-overdue adjustment, and it's not clear how far it's going to go or whether we've already seen the peak,” he told Asia’s “The Nikkei.”

“I know everyone has a forecast. But the evidence is very questionable at this stage,” he said.

“The markets are very sensitive because China's endeavor to prevent the market from going down is actually working in reverse,” he said.

He warned that China's growth is likely to slow over the long term, that the U.S. needs to face entitlement reform, and that Greece will remain uncompetitive as long as it stays in the eurozone.

Greenspan calls "fear" the biggest threat to financial structure.

Meanwhile, the U.S. economy seems like it will grow between 2% and 2.5% over the next year.

“We're starting to have a much slower rate of growth in employment, with a subdued rate of output per hour. ... That's going to have very important political implications in the United States,” he said.

And [entitlement reform], “as we say in the United States, is the most difficult thing to do for a politician. They believe that social benefits are the so-called third rail of American politics: You touch it, and you lose. And so, it's a fascinating discussion going on. Everybody knows it's the entitlement programs that are the problem, but nobody wants to discuss it publicly,” he said.

“We have to come to grips with it. That is the most important problem, as far as policy is concerned. I think monetary policy is not an issue. We've already used monetary policy as much as we can. Now we've got to confront this issue. If we don't, we're going to have a significant problem,” he said.

Other economic experts are more blunt, and paint a gloomier picture of the entire global economy.

Robert Kiyosaki, best-selling author of “Rich Dad, Poor Dad,” tells Newsmax TV that the global economy has collapsed and Wall Street has been manipulated by the Federal Reserve and US Treasury.

He said the only way to survive such a treacherous and volatile investing environment is with a solid financial education.

“The global economy is in a collapse right now,” he told “Newsmax Prime.”

“Wall Street is manipulated. The Fed as well as U.S. Treasury keep propping it up,” the founder of the Rich Dad company said.

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StreetTalk
Alan Greenspan, former chairman of the Federal Reserve, warns that the U.S. stock market is undergoing a "long-overdue adjustment" and it's "too soon to tell" if we are headed into a global economic crisis.
alan greenspan, economy, entitlements, stock markets
449
2015-59-14
Monday, 14 September 2015 07:59 AM
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