Greenspan policies `may lead to crash'
Monday 27 December 1999
The booming US financial markets face a double threat from an over-heating economy and an unsustainable balance of payments deficit, warned Professor Tim Congdon, of city analysts Lombard Street Research.
The professor, one of the "Wise Men" who advised the then Chancellor Kenneth Clarke, said there was a danger of a Wall Street crash if investors stopped buying American assets. "Sooner or later international investors will refuse to buy [US] assets on a sufficient scale and the longer the current account deficit keeps on widening, the worse the adjustment when it eventually comes," he said. "Mr Greenspan is still being lionised ... but he and his colleagues have mismanaged the boom of the late 1990s. If Mr Greenspan does not take action soon, international investors will have to do it for him."
The Fed signalled last week that it plans to raise rates early in the New Year. The speculation intensified days later after official figures revised third quarter growth to 5.7 per cent from an already meteoric 5.5 per cent.
In a paper published today, Professor Congdon accused US policymakers of "complacency" for not acting sooner when they realised the recovery in domestic and Asian markets was stronger than expected. He said low interest rates had only been justifiable when the US was acting as "consumer of last resort" while the rest of the globe was close to recession.
- 1 UK pirates will get four warning letters a year
- 2 Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
- 3 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 4 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 5 Students offered grants if they tweet pro-Israeli propaganda
Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
Is Gideon Levy the most hated man in Israel or just the most heroic?
Israel-Gaza conflict: Deadly flechette shells 'used by Israeli military in Gaza Strip’
Malaysia Airlines MH17 crash: Blogger captures footage ‘showing BUK missile launcher that shot down jet’ now back in Russia
In pictures: Israel-Gaza conflict
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£380 - £480 per day: Orgtel: Business Analyst - Banking - Edinburgh - £380 - ...
£70000 - £80000 per annum: Harrington Starr: My client is a leading financial ...
£850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...
Negotiable: Harrington Starr: Application Support Engineer (Windows Server, Ne...