Alan Greenspan, the chairman of the Federal Reserve for almost 25 years, said at a conference in New Orleans that financial markets will be suffering from growing pressure and inflation. The stock market is recuperating faster than the country’s economy, which will have an inevitable effect. Greenspan predicts bankruptcies in the U.S. financial sector. In his words, such crises happen once in a century and have grave repercussions. The economist believes that the U.S. should help private banks, the crisis would end when real estate prices stabilize.
Dmitry Piskulov, the chairman of the board of the National Currency Organization, told Vestnik Kavkaza that the world was on the edge of a global crisis because the quantitative easing, invented by Ben Bernanke, the predecessor of Greenspan at the Federal Reserve, was the main reason. He reminded that the procedure had been used in Europe but it would not stimulate consumer demand due to deindustrialization in the U.S. and Europe, when industry was moved to China. Inflation may occur. Monetary measures, Piskulov explained, had started working to keep the rate lower, to stimulate credits and make them cheaper. He believes that a switch to Neo-Keynesian economics may be needed to stimulate demand via expenses, fiscal policy and so on. 80% of world bank assets are controlled by 20 financial institutions, half of which are U.S. A possible fall of any of them would freeze many loans, creating default risks, like in 2008. Piskulov assumes that the U.S. would not let that happen.
The expert doubts that the global economy is dealing with a bubble because there is no sudden fall of price growth on commodity markets. On the contrary, oil prices are falling. Prices are not making a sudden rise for metals. The Russian stock index is quite high.
Piskulov said that the policy of rising consumerism and consumer loans ran out of steam and was about to start declining. Besides the consumerism crisis, the analyst sees the classic overproduction crisis mentioned by Marx, when stores have plenty of goods to offer but no consumer demand. Piskulov believes that the only solution is to find a new development paradigm based on new energy spots or new materials. The consumer cycle formed after WWII is coming to an end, he concludes.
Alan Greenspan, the chairman of the Federal Reserve for almost 25 years, said at a conference in New Orleans that financial markets will be suffering from growing pressure and inflation. The stock market is recuperating faster than the country’s economy, which will have an inevitable effect. Greenspan predicts bankruptcies in the U.S. financial sector. In his words, such crises happen once in a century and have grave repercussions. The economist believes that the U.S. should help private banks, the crisis would end when real estate prices stabilize.Dmitry Piskulov, the chairman of the board of the National Currency Organization, told Vestnik Kavkaza that the world was on the edge of a global crisis because quantitative easing invented by Ben Bernanke, the predecessor of Greenspan at the Federal Reserve, was the main reason. He reminded that the procedure had been used in Europe but it would not stimulate consumer demand due to deindustrialization in the U.S. and Europe, when industry was moved to China. An inflation may occur.Monetary measures, Piskulov explained, had started working to keep the rate lower, to stimulate credits and make them cheaper. He believes that a switch to Neo-Keynesian economics may be needed to stimulate demand via expenses, fiscal policy and so on.80% of world bank assets are controlled by 20 financial institutions, half of which are U.S. A possible fall of any of them would freeze many loans, creating default risks, like in 2008. Piskulov assumes that the U.S. would not let that happen.The expert doubts that the global economy is dealing with a bubble because there is no sudden fall of price growth on commodity markets. On the contrary, oil prices are falling. Prices are not making a sudden rise for metals. The Russian stock index and is quite high.Piskulov said that the policy of rising consumerism and consumer loans ran out of steam and was about to start declining. Besides consumerism crisis, the analyst sees the classic overproduction crisis mentioned by Marx, when stores have plenty of goods to offer but no consumer demand. Piskulov believes that the only solution is to find a new development paradigm based on new energy spots or new materials. The consumer cycle formed after WWII is coming to an end, he conclu
