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Posted on 09/21/2007 5:28:58 PM PDT by GodGunsGuts
House prices to drop much lower: Greenspan
Fri Sep 21, 2007
VIENNA (Reuters) - A big overhang of property will bring U.S. house prices down further, but it is too early to say if the economy will plunge into recession, former Federal Reserve chief Alan Greenspan was quoted as saying on Friday.
Greenspan said in an interview with Austrian magazine Format that low interest rates in the past 15 years were to blame for the house price bubble, but that central banks were powerless when they tried to bring it under control.
"It's a difficult situation, there is an enormous overhang on the real estate market," Greenspan was quoted as saying. "Many buildings which just have been finished can't be sold ..."
"So far, prices have dropped only slightly. But it was enough to cause alarm around the world," he said. "Prices are going to fall much lower yet."
"However, it is too early to answer the question about a recession. We simply don't know yet. It depends on how flexibly the economy can react," he said.
Greenspan said deregulation and the introduction of market economies in the former Communist bloc after the Berlin Wall fell in 1989 had caused a global boom and a worldwide reduction of interest rates, which both helped fuel the property bubble.
"There is no doubt about the fact that low interest rates for long-term government bonds have caused the real estate bubble in the United States," he said.
"The Federal Reserve began a series of interest rate increases in 2004. We were hoping to bring the speculative excesses in the real estate sector under control. We failed. We tried it again in 2005. Failure," he said.
"Nobody could do anything about it, neither us nor the European Central Bank. We were powerless," he said.
Sounds like a good time to buy a house cheap.
Alan Greenspan’s feeble attempt to rescue his legacy. If he had retired earlier, perhaps his newfound honesty could have done some good. Can’t stand the sight of that man anymore.
“So far, prices have dropped only slightly. But it was enough to cause alarm around the world,” he said. “Prices are going to fall much lower yet.”
Man, I wish I had his crystal ball.
We are a long way from that. Housing is just an indication of what’s to come. People need to start learning how one makes money in both good times and bad. And fast.
http://www.freerepublic.com/focus/f-news/1899312/posts
Problem is, he knew this along time ago (as did anyone who was truly paying attention). And yet he failed to warn or do anything about it, except make the problem worse. They don’t call him Alan “Bubbles” Greenspan for nothing—GGG
You sound just like Hydroshock.
$82 per barrel oil been bery bery good to me.
$730+ gold has been very good to me. But that’s not the point.
That name sounds familiar, but I’m not sure why. At any rate, it’s time to get right or get left by the changing markets.
http://www.freerepublic.com/focus/f-news/1899312/posts
It’s manipulation we need to get out from under the fiscal policy of the FED!
They should reinstitute the Department of Treasury to issue currency and take it away from the fed. Either that or put our currency on both a gold and silver coinage (plus other commodoties) standard!
“People need to start learning how one makes money in both good times and bad. And fast.”
Shhhhhh! Quit ruining it for the rest of us Capitalists! There’s only so much cash to go around, LOL!
Very funny. But of course, the more people who belatedly learn what to do, the better it is for those who planned ahead. Still...LOL
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Nice touch!
but the taxes stay the same till the assessor decides the value has gone down...
I saw this clown on Charlie Rose last night spinning away like a dervish. So full of himself . . . Reminded me of Bill Clinton.
bump
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