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Charlie Rose interviews former Fed Chairman Greenspan. He talks about the almost certainty of a Greek default, why US economic recovery has been so weak, prospect for inflation, among other things. Despite that his reputation was severely tarnished in the past few years, Greenspan offered some really good insights of the current state of the economy.
(click on the graph for the interview)
A few interesting points to note:
1. (this is not new in his thinking) It’s not only real economy that drives equity market: but also it’s the other way around: equity market also drives real economy. The channel is stock prices help ratings of corporate debt.
2. He is very worried about US fiscal situation;
3. China is a bubble waiting to burst. But the impact will be uncertain.