This morning on CNBC another dubious source... A. Greenspan,,,, while acting like his legacy is not a big part of the problem... Says The Market will Not Tolerate Historic Low Interest Rates and We Don't Have a Plan B for when the costs to borrow go up maybe suddenly.... The U.S. will pay a lot more to borrow which could further devastate our economy.... Money Printing and Gov Stimulus pay outs to administration friends is no way to re-build an economy.... See?
"that's what scares me is we don't know when a bond market event can happen but it can be violent and with how much we owe right now, every man, woman and child, if we were paying thatback at 5% or 6%, it's almost look spain.it's almost unsustainable for us. i hope it's not like spain.markets are not tolerant.they have been, though.they have been until they're not. there's a general assumption,almost every economist i speak to say we'll deal with the longer term problem later, let's get to work now on short-term stimulus. that presupposes something they do not know, namely will themarkets tolerate that?i know of no way you can make that judgment. i'm not even sure i'd say necessarily that they're wrong. i'm just saying to say implicitly it's 100% probability, that is wrong. and we don't have a plan b.and john taylor used to work for you.he's a lead editorial in the wall street journal. he talks about the federal reserve, qe 1, qe2, twist and now, i'll ask you, qe3 may be more likely, dodd-frank, are all of those things hurting the long term? i don't want to go throughthe list as such but the fact is clearly clear at this stage that whatever it is, and there's lots of reasons -- government activism? there's more to it than that. but the problem basically is what we have got a system at this particular stage which is best measured, as far as i cansee, by -- if you want to learn what the degree of uncertainty is and the level is what i've been using for quite a long period of time is to watch what corporate executives do, whatproportion of their cash flow they choose to invest in long-term assets. that number in early part of 2010 was at the lowest ratio since 1935. there were equivalent things in the non-corporate area, there's a significant type of contraction, very much for the same in the same reasons inresidential building.in short there is a fear of the future. and when you begin to try todisaggregate what's causing that, you come up with probably 40% of it is just the fact that the economy is sagging. it's low prices for these assets, low prices in the market for some of these assets, too.well, basically wha it is is essentially if you do the statistical analysis of what's causing the share of cash flow to be so --
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