Mar 05 2007
What is happening in the markets?
We have seen several days of plunging share prices. We are now hearing several varieties of explanation. What began as fear stalking the Shanghai Exchange, as rumours swirled of a forthcoming clamp down on borrowing and speculation by the Chinese authorities, has transmuted into a more general panic about the US economy.
Mr Bernancke, the current President of the Fed, has said he still expects the US economy to grow this year. Mr Greenspan, his predecessor, warns that there could be a recession. The Martians could land as well, but the Fed probably doesn’t think that very likely either.
So why did Mr Greenspan say it, and why did some people apparently believe him? All the forecasts I see still show some growth in the US during 2007.
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John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
JR: “What is happening in the markets?”
Is the result of government sponsored inflation, coupled with its logical conclusion a debt based economy. The consumer has been encouraged to take on more and more debt, if the mortgage market is about to roll over, well Tories know what that leads to. Sooner or later the bubble in the economy will be burst, printing more and more money to stave off the evil day, is the sort of medication that has caused the problem and will make it worse before it gets better.