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Alan Greenspan: Money Printing Didn’t Work




By FITSNEWS || Former Federal Reserve chairman Alan Greenspan – himself a supporter of liberal monetary policy – is blasting the massive money-printing “stimulus” that took place under his successor Ben Bernanke (and which is continuing to some extent under current Federal Reserve chairwoman Janet Yellen).

In an interview with The Wall Street Journal, Greenspan – who ran the Fed from 1987-2006 – said the secretive central bank’s “quantitative easing” plan did not accomplish its objectives.  He also said the removal of the artificial “stimulus” from the economy would be painful.

Great …

For those of you keeping score at home, the first round of quantitative easing, known as “QE1,” took place from November 25, 2008 through March 31, 2010.  Over that period, the Federal Reserve added $1.7 trillion to its balance sheet ($300 billion in Treasuries, $1.2 trillion in mortgage backed securities and $175 billion in agency bonds).  The second round, dubbed “QE2,” took place from November 3, 2010 through July 1, 2011.  Over that period, the Fed added $600 billion in Treasuries to its balance sheet.

Another so-called stimulus plan offsetting longer term securities with the sale of short-term debt (a.k.a. “Operation Twist”) began in September 2011 – and was extended in June of 2012.

And of course in September 2012, the Fed began its latest and greatest round of money printing – an open-ended commitment to create $85 billion in new assets each month.  In January 2014, the Fed began to “taper” this commitment – reducing its money-printing by $10 billion a month.

Soon, the money presses will be shut down completely … but to what end?

Everybody knows what this grand experiment was … the greatest redistribution of wealth from the poor and middle class to the rich ever .

If you don’t believe us, ask one of the architects of the plan.  He’ll tell you.

And now Greenspan, the “Maestro” himself, is weighing in on the broader economic failure of this redistribution …

“Effective demand is dead in the water,” Greenspan told the WSJ, adding the money-printing “did not work.”

He added that he “didn’t think it was possible” to unwind the money-printing without adverse consequences to an economy that’s become hooked on the drug.

“We’ve never had any experience with anything like this, so I’m not going to sit here and tell you exactly how it’s going to come out,” he said, adding that the pressure to raise interest rates would likely come from the market, not the central bank.

Greenspan’s advice?

He encouraged investors to buy gold … arguing it was not subject to the whims of government monetary policy.

Awesome … now he tells us, right?

Of course if at first you don’t succeed … print, print again.