Debunking Greenspan

Once again, Greenspan increased short term interest rates by 25 basis point ( or .25). The short term interest rates now stand at 3.5% . Greenspan's move was expected. No surprises here. Here are some highlights from the Federal Reserve Board Press Release:

"Aggregate spending, despite high energy prices, appears to have strengthened since late winter, and labor market conditions continue to improve gradually"

This should be written to "Aggregate spending, despite high energy prices and because of the credit bubble [ which this Federal Reserve Board is partially to blame ], appears to have strengthened since late winter. The labor market conditions continue to improve gradually based on an unsustainable housing bubble and reckless consumer spending "

"Core inflation has been relatively low in recent months and longer-term inflation expectations remain well contained, but pressures on inflation have stayed elevated."

How about housing prices and energy costs? Oh, I forgot they are not included in the CPI.

"Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability"

How about doing more to maintain lending standards? Wait, every American has the right to get a 500K loan even though they have a 70K income, zero money for a down payment and credit score of 600.

Greenspan is pathetic. He should resign sooner, rather then later. The credit bubble has been 'great' for the short term ( 2001 - 2005 ), but it will be disastrous for the long term. Neglect the long term for the short term, that is Greenspan's gameplan. Remember, "With great power comes great responsibility."