CNBC Excerpts: Former Fed Chair Alan Greenspan Speaks with CNBC’s “Squawk Box” Today
WHEN: Today, Thursday, October 18, 2018
WHERE: CNBC’s “Squawk Box”
[REITs]
Q3 hedge fund letters, conference, scoops etc
Fed Chair Alan Greenspan: We are in uncharted territory
Alan Greenspan: Tightest labor market I’ve ever seen
Greenspan: Jay Powell is extremely competent
Greenspan: We have to deal with entitlements
Greenspan: The financial community doesn’t care about bookkeeping, they’re going to confront inflation
All references must be sourced to CNBC.
GREENSPAN ON THE FED
GREENSPAN: EVERY PRESIDENT HAS AN INSIGHT INTO HOW THE MARKETS WORK AND WHERE INTEREST RATES OUGHT TO BE, WHICH IS ALWAYS SUPERIOR TO THAT OF THE FEDERAL OPEN MARKET COMMITTEE.
KERNEN: SO THEY THINK.
GREENSPAN: I MEAN THE BEST THING YOU CAN DO IF YOU ARE IN THE FED IS PUT EARMUFFS ON AND JUST DON’T LISTEN.
GREENSPAN ON ENTITLEMENTS
IS IT ENTITLEMENTS, WHICH ARE GOVERNMENT AUTHORIZED, OR IS IT THE MARKET ADJUSTING? AND ALL OF THE EVIDENCE SUGGESTS THAT ENTITLEMENTS ARE EMBODIED IN THE OUTLOOK AND THEY WILL NEVER CHANGE THEIR PATTERN. THEY ARE MANDATED BY LAW. THEREFORE, ALL OF THE IMPACT IS ON THE REDUCTION. AS ENTITLEMENTS GO UP, GROSS DOMESTIC SAVINGS GOES DOWN AS A PERCENT OF GDP.
GREENSPAN ON SINGLE ENTRY
THEY ARE ALL INVOLVED IN SINGLE ENTRY BOOKKEEPING. THEY DON’T LIKE TO DO JUST THE DEBIT SIDE, THEY JUST WANT THE CREDIT SIDE. AND THE WORLD IS DOUBLE ENTRY. IF WE WANT TO GET OURSELVES INTO REAL SERIOUS TROUBLE, DON’T ATTACK THIS PROBLEM. I’M TELLING YOU SWEDEN SOLVED IT. THE SOLUTION IS NOT ECONOMIC, IT IS POLITICAL. AND THE QUESTION IS DO WE HAVE THE GUTS TO DO WHAT THE SWEDS DID.
GREENSPAN ON A SOLUTION
ALL YOU HAVE TO DO IS GET THE FINANCING SYSTEM THAT CREATES THE REVENUES THAT THE ENTITLEMENTS CREATE AND TO BE SURE AS THE POPULATION AGES, WE ARE GOING TO BUILD UP EVER INCREASING ENTITLEMENT LEVELS. AND AS FAR AS I CAN SEE, EVERYONE IS BLINDING THEMSELVES TO THAT FACT…NOBODY IS LISTENING. THE REASON THEY DON’T LISTEN IS THAT THE FINANCIAL COMMUNITY DOESN’T CARE ABOUT BOOKKEEPING. WHAT THEY CARE ABOUT, WHICH IS WHAT THEY ARE GOING TO CONFRONT, IS INFLATION.
