"The pronounced decline in U.S. Treasury long-term interest rates over the past year despite a 200-basis-point increase in our federal funds rate is clearly without recent precedent. The yield on ten-year Treasury notes currently is at about 4 percent, 80 basis points less than its level of a year ago. Moreover, despite the recent backup in credit risk spreads, yields for both investment-grade and less-than-investment-grade corporate bonds have declined even more than Treasuries over the same period."
Ahhhh...the conundrum. The paradox, a most unusal paradox. And anomaly even, you suppose?
He concludes:
"The economic and financial world is changing in ways that we still do not fully comprehend. Policymakers accordingly cannot always count on an ability to anticipate potentially adverse developments sufficiently in advance to effectively address them. Thus our economies require, in my judgment, as high a degree of flexibility and resilience to unanticipated shocks as is feasible to achieve."
GREEDSPAN'S MONSTER......IS OUT OF CONTROL NOW.....AND NO ONE KNOWS WERE IT'S GOING.
One "hypothesis" that Greenspan doens't mention for the low rate anomaly is that HIS POLICIES HAVE BEEN A DISASTER FOR THE WORLD ECONOMY!
But then we wouldn't expect him to say that, would we.....? Even though it is the BEST EXPLANATION FOR WHAT'S REALLY HAPPENING.
