"We're In Trouble": Alan Greenspan Delivers Stark Warning

Tyler Durden's picture

Were you wondering what Alan Greenspan thinks about the outlook for monetary policy across the globe?

Neither were we, but Bloomberg was and Tom Keene and Mike McKee got the “privilege” of sitting down with the “maestro” on Monday afternoon to discuss a variety of topics including NIRP, which Greenspan says “warps investment behavior.”

While he isn’t willing to go so far as to condemn negative rates as “dangerous,” he does say the global race to the proverbial Keynesian bottom is “counterproductive.”

As far as the US economy is concerned, Greenspan isn’t optimistic. “We’re in trouble basically because productivity is dead in the water…Real capital investment is way below average. Why? Because business people are very uncertain about the future.”

Well yes, they most certainly are. Of course were it not for “the Greenspan put” and decades of policy largesse we might not have ever had a financial crisis in the first place (David Stockman will tell you all about Greenspan’s role in creating the conditions we now find ourselves in).

As for whether Dodd-Frank has solved anything, Greenspan says no: "The regulations are supposed to be making changes of addressing the problems that existed in 2008 or leading up to 2008. It's not doing that. 'Too Big to Fail' is a critical issue back then, and now. And, there is nothing in Dodd-Frank which actually addresses this issue."

And finally, here’s the punchline. Asked whether he’s optimistic going forward, Greenspan said this: "No. I haven't been for quite a while. And I won’t be until we can resolve the entitlement programs. Nobody wants to touch it. And that is gradually crowding out capital investment, and that's crowding out productivity, and it's crowding out the standards of living where do you want me to go from there."

Here are the clips in which Greenspan touches on everything from NIRP to faux Chinese GDP data to US crude production:

Now if only he hadn't gotten us into this mess in the first place...

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offwirenews's picture

The Originator himself

Pinto Currency's picture



The Austrian concept of 'time preference' dictates that low interest rates cripple the economy until it collapses.

The Fed has, and continues to, apply the malpractice of "you need low interest rates" and more dept to reach "escape velocity" - and they will do so until the monetary system collapses.


kliguy38's picture

I think its very admirable to speak truth especially after you loaded the train with 40000 lbs of TNT

nope-1004's picture

Because business people are very uncertain about the future.


Disagree.  I think everyone knows what the future brings.  It's the banking cabal that won't let reality take place, won't let their own insolvent institutions fail, and want to keep consumerism alive by thinking pricing the currency at worthlessness or negative is "stimulus".  This all means we have to flush the Fed and the banking system down the toilet for a true recovery to take place.

So stop lying Greenspam.  You know damn well why things aren't good.


wee-weed up's picture

The greenturd is hoping to avoid the inevitable rope & lamppost.

weburke's picture

when, and WHY did he learn to actually say something. 

two hoots's picture


Brains go to complete corrupt political mush with any key position at national/mega corporate level.  Only after they have deprogramed themselves do they begin showing signs of common sense and reason.  Maybe it’s the getting ready to meet the maker thing and they want to “get righter”?  Too bad they can’t be consistently reasonable, honest and trustworthy during their tenures.  I think Regan was close and Trump will be likewise.  Others don’t last long if they don’t adapt.


BuddyEffed's picture

If Alan needs some insights :

From : http://www.zerohedge.com/news/2016-02-23/financial-time-bombs-hiding-pla...
"That’s how we get to the crime of NIRP. Keynesian central banks cannot imagine a problem for which more debt is not the solution. But is it not lack of “aggregate demand” which is idling an increasing share of the world’s oilfield drilling equipment; nor did it cause Caterpillar’s heavy mining machinery sales to plunge or the Baltic Dry index to plummet to 30-year lows.

What is driving output, wages and profits drastically southward throughout the materials and energy complex is drastically sinking profits and a desperate need to conserve cash flow in order to survive. The CapEx budget of global mining giant BHP is a proxy for what is becoming a global CapEx depression in the world’s industrial economy. "


And what's driving all of that in my humble opinion is resource constraints caused by depletion of the physically easiest to get (closer to surface and in nearby locations and in higher ore grades) and hence the cheapest to get natural resources.

The easiest to get copper, aluminum, gold, silver, diamonds, oil, coal, natural gas, iron, manganese, fish, trees, etc. etc have all been harvested pretty hard for the past 100 years or so. When the industrial revolution came to us, we got really good at the extraction of non renewable natural resources.
Once those easiest and cheapest resources are gone and the more expensive and harder to get resources are all that is left, that changes business models and the expectation of profits from corporate activities. Business models that were stable for decades and decades become structurally challenged, and at risk of not being able to generate a profit and keep going as valid concerns.

Hence the games of PPT, QE, NIRP, and banning cash come into play for various reasons such as to purchase the large amounts of bad paper associated with subprime that others would not touch and to help people not notice the underfunded pension plans and unfunded liabilities and the decreasing chance that those models and assumptions will hold together intact while the appearance of them holding must be maintained no matter what. And hence the similar recent government policies on the importance of the keeping up of appearances in China, Japan, Turkey, etc.

Hope was placed on substituting with other resources based on new technology. We all were hoping we could "upgrade". But the strongest upgrade of all in the past 2 centuries was the increasing energy content in our choice of fuels, from wood, to coal, to oil and the increasing FF energy at our disposal did wonders for real (old fashioned) GDP and provided positive reinforcement for an increasing rate of industrialization. Under the increasing rate of industrialization scenario debt/credit could be used in the financial system to pursue new physical resources or new processes and obtain profit/ROI. Now that upgrade trend seems to be stalled out with indications of deteriorating EROEI, and possibly about to reverse and begin on a downgrade where new debt/credit may not be able to garner anything new or any surplus at all and might not even get return of investment back either. Sure, some renewables came into play across the decades and it helped, but most of the heavy lifting was always done with FF, and the current economy is still highly dependent on FF.

Sadly, we did some inefficient things in big ways too. Rail and boat traffic are very energy efficient ways to move things around. But when the rubber hit the road with automobiles, the energy efficiency of moving things per unit of weight dropped considerably. When we chose that more inefficient mode of transportation of rubber on the road, and ran with it so hard, there was plenty of FF surplus at the time so it made short sighted sense in a way, and it was big fun too.

This might give you some clues on why that "markit" is not following their wrong headed models :


And this : http://www.theoildrum.com/node/7062
And this : http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf

nope-1004's picture

Glad you know what "FF" means.  Would have helped an idiot like me tho

Far Field?

Fatally Flawed?'

Fully Furnished?

Fuel Flow?


BuddyEffed's picture

.Far Flung
Fast & Furious
Fist Fight
French Fries
Forest Fire
Fancy Free
Freaky Friday

MagicHandPuppet's picture

<--- I should pour some scotch.
<--- I should watch all of these videos, no matter how painful it is to hear this ol' curmudgeon's voice.

chicaboomboom's picture

Yellen, Fischer, Bernanke, Greenspan - How the Ashkenazi Jews conquered the West >> https://goo.gl/bFYusM

onewayticket2's picture

it's year 8 of obamanomics and his admin's gumming up of the system, his war on the productive and the 'what's up is down, what's good is bad' economy.


let's not leave out our policymakers who advertise to get people ON foodstamps, who sign Exec Actions to OPEN the borders, who bypass the Constitution and thumb their nose at voters.....the future?  'uncertainty' would be great....that implies some positive possibility.    

Richard Chesler's picture

Another corrupt joo speaks.

Who the fuck listens to these thieves?


Four chan's picture

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." ag

HardlyZero's picture

At first I thought it was Steve Keen (Australian/UK economist who hangs with Max Keiser) grilling "the Maestro"...I would have paid scalper's prices front row center for that.  Tom...not so much.


BTW is Glitter Girl up for hire to jump these events ?

Manthong's picture

I have a hard bound copy of “Atlas Shrugged”. in my extensive economics library.

I would greatly like to take that book along with “Debt, the First 5000 Years’, “It’s Different This Time” , “The Death of Money” and maybe a few more and then shoot them at very high velocity straight up his festering, rotten old bung hole.

Four chan's picture

i'll buy that for a dollar.

Element's picture

Taze the farts out of the old git.

VinceFostersGhost's picture




when, and WHY did he learn to actually say something. 



Because someone has to act like a freakin grownup?

yngso's picture

Because at 90 he has to back-pedal furiously insted of enjoying nemories of a long and rewarding life.

Moe Howard's picture

Thanks for posting one of the few times Alan Greenspan AKA WormLips told the truth.


Here's the whole enchilada [or bagel as you prefer]:


Old Doctor's picture

Jacob Lew, Kissinger, Ruben, Rotheschilde. It's a real parade of criminals 

acetinker's picture

Yeah, OK Buddy- all that and shit.  FT/alphaville....?  Seriously?  It couldn't possibly be debt saturation, combined with the relatively minor symptoms of same that you claim are causes, could it?

You disingenuous fuck.

How does Yellen's dick taste?

BuddyEffed's picture

Debt saturation?  Nah.

It's just that real growth is gone now and likely to never come back.   Evidence :  Can't get 4% on a savings account anymore.  Pension funds are underfunded as are a lot of other liabilities and they are putting a crimp on budgets at all levels.

If growth was still here, we wouldn't be fighting over the precious little left untapped resources, and austerity wouldn't be in the headlines along with high youth unemployment.

If there was still growth, the middle class would still be fat dumb and happy instead of shrinking so rapidly.

And as far as Yellen goes, I'm pretty much at the opposite end of the scale, but smart enough to see through to the truth because of my training as an electrical and software engineer.

acetinker's picture

You are 'obviously' smarter than me, as evidenced by the up/down vote thingy.

Why is 'growth' pre-requiresent, Buddy?

You're a lost ball in the tall weeds, Buddy.

Thanks for the reply.


BuddyEffed's picture

Growth is what happens on the front side of this curve : http://www.theoildrum.com/node/7062

Growth is a lot of fun!

Contraction happens on the backside of the curve. It's not anywhere near being fun for most people.

acetinker's picture

Growth requires capacity.

That capacity is over-reached.

I don't wanna give you hell just for the sake of givin' you hell, but if you had an actual brain, you'd see why I do it.

Don't short Facebook, whatever you do! ;)


acetinker's picture

You're gonna hafta 'splain ESAD!  I dunno what you mean.

Break_the_Bank's picture

Great posts Buddy.

As I think about your analysis, I believe that the higher cost of resource extraction will eventually translate to increasing costs of goods. The poor employment situation for the young and the soon to be witnessed cut in retirement benefits for the old (http://www.zerohedge.com/news/2016-02-18/i-guess-its-food-stamps-400000-...), will set up a perfect storm of higher prices for goods and less ability to pay. And now that the entire globe has inflated debt bubbles and asset bubbles to the extreme (leveraged to astronomical heights via derivatives), growing our way out of the mess will be, dare I say, impossible. Expecially when it now takes $4 of deb to add $1 of additional global GDP. 

Stagflation occurs when an economy is suffering from stagnation and inflation, which means there is no economic growth, high unemployment, and high prices.

I think we are experiencing the beginning of stagflation now, as the BLS and other purveyors of government statistics all manipulate the facts to hide the truth.

John Williams is helpful on the topic of government manipulated statistics. http://www.shadowstats.com/

I could be wrong, but I think that some event (perhaps a DB derivatives implosion) in the not too distant future will cause the manipulators to lose control, and the truth of the situation will be revealed. At that point panic will ensue and change the game.

BuddyEffed's picture

Another possibility of the truth being revealed would be if Putin were to go public with confirming statements as a form of blowback to any future events where the desperation for resources impinges on his circle of influence, or if some other oligarch with insider knowledge were to leak some inside info. 

I did think about mentioning the manipulated statistics and John Williams as further proof.  Thanks for the tie in on that.

The unusual and numerous bailout outs that have occurred are also a sign, as is the move towards bail ins too.

And the numerous large protests of desperate populations seeking change are an indicator too.

And the pressure on retail business models such as with Walmart, JCPenney, Macys provide indication too.  Even McDonalds business model is soft.  And as ZH notes today, even Sports Authority's business model is poor.  I wouldn't be suprised to see the whole sports and stadiums business model showing signs of weakness since they aren't basic necessities and their prices are getting to be in the luxury range.

I suspect that some in the TBTF might be using inside knowledge to coerce their lack of prosecution, such as Corzine maybe?  How else do you get away with that?

I agree with a derivatives crisis as a possible trigger to a come to Jesus moment.  The QE events from many of the CB do tend to band aid things though, and the banking powers will work behind the scenes to avoid any credit defaults from being the trigger.   Behind the scenes deals will likely be made to the holders of some derivatives.

Any loss of control, even partially, may wait until the desperation in some places gets so bad that martial law breaks out, or worse. 

acetinker's picture

You really are clueless, aren't you?

I've already explained how the current paradigm requires endless 'growth', and why.

You seem to have a superficial knowledge of same, vis-a-vis your acknowledgement of the derivatives market.

So, riddle me this, Einstein-

How does a debt-based Ponzi continue when the pool of new participants either shrinks, or refuses to participate?

I await your reply.

Raging Debate's picture

Acetinker - Your correct. Demographics drives destiny. It is for the time being, a shrinking pool of consumers. 

 Greenspan was the Maestro of 'kick the can'. I believe his hope was enough quadstacking could generate enough tech advances to bridge the gap to the other side of the cliff. But even if well meaning one man isnt going to fight and win out over short term thinking of the species. I hope the old goat gets some peace now. I realize I may have tried the same approach with monetary policy. Flame away. 

 As far as where we are at now, the result is failure. End Central banking. Treasuries can do all the roles and in the digtital/information age data collection, aggregation and analysis needs no wizard to parch the data. 

Mr. Magoo's picture

B.S everthing is just fine look at all the data

Oh wait

Antifaschistische's picture

Real capital investment is way below average.....LOL

Maybe if we'd spend LESS money buying back our stock to keep our VIP options in-the-money, we would have more money for CAPEX....but CAPEX is for people who are looking WAY down the road...like 2 years....that's way too old fashioned.   It's 1/4 by 1/4 baby and that's all that matters.

Farqued Up's picture

More capex to build inventories even higher to mold or rust on the shelf or warehouse. No, there is only one solution to the gov crowding out the producers. KILL THE GOV!! The enablers will then become producers in lieu of parasites.

Frankie Carbone's picture

Brains go to complete corrupt political mush with any key position at national/mega corporate level.  Only after they have deprogramed themselves do they begin showing signs of common sense and reason.  Maybe it’s the getting ready to meet the maker thing and they want to “get righter”?  Too bad they can’t be consistently reasonable, honest and trustworthy during their tenures.  I think Regan was close and Trump will be likewise.  Others don’t last long if they don’t adapt.

With respect to the bolded, how do you know this, or do you just want to believe it in your heart? What evidence do you have to support this assertion? 

Convince me. If not me, then use it as an opportunity to convince others. Surely someone making a statement like this has hard facts to support his assertions. 

In Ze No's picture

Dude, you missed why they trotted him out and he did tell us.  He was here to light the fire under the elimination of "entitlements",  Greenspan 's job was to put the blame for what we now face on the poor and elderly, because he can't see the way out of this while entitlements are left intact.  Yeah, sure, you lying creep, Greensoul..  This post credit bubble tar pool  the country finds itself in has nothing to do with the billions flowing to those pulling your strings.  What a con job that appearance was.

iggenFlot's picture

You won't be introducing anyone to a rope, Bob. First of all, the wife has a long list of honey-dos, so you'd be too pooped after you folded the laundry, took the trash out and did the dishes. If you've got 30 minutes you can call your own, you're cracking open a beer and dozing off on the couch.

Yeah, you're only about the ten-thousandth Zero Hedge loser who has mused that "someone" will string up these infernal central bankers - "someday."

Uh huh. STFU, you piece of shit.

indygo55's picture

Its a forum buddy. Its the conversation. It keeps the discussion alive. Maybe its not him but its someone else. Without the discussion there is nothing. 

And so just where do YOU fit in here?


Oh yeah: TROLL