Here is what I call GREENSPAN'S PARADOX, or THE MIRACLE AT THE FED!
GREENSPAN PRINTED SO MUCH MONEY THAT.....?
HE ACTUALLY CAUSED A CRASH IN GOLD!!
How so? This seems irrational. A paradox even! A most unusal
paradox!
But Consider:
It's like deflation causes inflation which causes deflation!
Clear?
Fearing the glut of goods from China and the deflation resulting,
GREENSPAN STARTED TO PRINT MONEY. To stop the "deflation" right?
But, Greenspan printed so much money that commodity speculation
started up; eventually causing some "pass through inflation" into the
real economy. Right? OK, so far?
But, this pass through inflation caused bonds to crash, and rates to
be raised.....
OK? Now hang on because it's going to get a little wierd!
THEN THE RISE IN RATES CAUSED THE OVER-PRINTED GREENSPAN DOLLAR TO
SURGE!!
AND, THAT, IN TURN, CAUSED GOLD, (the other side of the "short dollar
trade"), TO CRASH!
SO, BY PRINTING DOLLARS LIKE MAD GREENSPAN ACTUALLY MADE THE DOLLAR
STRONGER!
AND CAUSED GOLD TO CRASH!
Fasten you seat belts.....
The crash in gold caused other commodity metals to also crash! AND
THAT, IN TURN, IS DEFLATIONARY!!
SO, BY PRINTING DOLLARS WITH RECKLESS ABANDON GREENSPAN HAS CAUSED
THE DOLLAR TO GET STRONGER, AND THAT CAUSED THE DEFLATION TO KICK IN
AGAIN!!
DEFLATION CAUSED INFLATION WHICH CAUSED DEFLATION!
CALL THE POPE! WE HAVE JUST WITNESSED A MIRACLE!
I CALL IT: GREENSPAN'S PARADOX!
Postscript: To my knowledge this is the first time that this strange
economic phenomenon has been described in print.
Anyone wishing to use the above material is requested to give proper
credit to it's discoverer. Namely, the Gloom and Doom Club and
theeditorialdotcom.
If the Nobel Committee wishes to contact me about what name to put on
the check. Just e-mail this group for further instructions.
