The Worldwide Investor

A media war recently has pitted the former “guru” of central banking against pundits who claim that he is to blame for the current housing crisis. Mr. Can-Do-No-Wrong of the 1990s is now being accused of sacrificing the long term to save the short term crisis that existed when the tech bubble burst. How much of an effect did long lasting low interest rates have on the housing bubble in America, that is now threatening to throw the economy into a recession, or possibly worse? And is Greenspan’s argument that the run-up in housing being a worldwide phenomenon exalt him of any wrong doing in this matter? Those issues are discussed below. (more…)