Greenspan Sees Negative Inflation Due To Entitlements Crowding Out Private Investment
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- เผยแพร่เมื่อ 10 ก.ย. 2020
- Alan Greenspan did an interview on CNBC talking about inflation and he feels the outlook is negative due to entitlements crowding out private Investment and slowing productivity growth.
www.cnbc.com/2020/09/10/alan-...
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Social Security is NOT an entitlement. It was built by payments from workers and their employers. The problem came from politicians that took the funds and used the money for other political purposes. Had they not done that SS would be just fine.
When social security was devised, life expectancy was, 62, and 6 months.The government needed a way to finance the, wpa. Ccp, and the other job works, plan's. That were all knocked down by the courts. The government had no intention of ever paying anyone
@@markchristensen5206 they took my money since 1973....
Butch edwards , they took mine, from 1960. I was told then by my father, son you'll be lucky to see it. By the way, when the government issued, social security cards, mine it said,NOT TO BE USED AS IDENTIFICATION. reason was people remember who, and didn't want to be labeled as a number. So much for not to be used for IDENTIFICATION. liers
Exactly Spot on
Socail security should be doubled its nothing. Peanuts
Dude you have been a wealth of knowledge over the last couple of months. There's no way all of us could keep up with all the stuff you cover and we are grateful you spend your time explaining/showing your perspective.
Federal Reserve and asset class may want to wake up to the fact they are not entitled to endless inflation. Economic cycles do happen! 👽
Yes, the decade of ZIRP has been the largest wealth transfer in history. Its bankrupting pensions and its stolen from savers ability to make a free market rate on that savings to speculators to ride asset bubbles to the top- now they are trying to steal our deflationary cycle.
It's due to boomers withdrawing from capital investments, not because they solely need to flatten the yield curve for debt.. they prop corporations with cheap debt because corps cant service their debts with their profit returns...which would cause a collapse in the stock market as the boomers need it most
@@sparksj20 we all need high free market interest rates! Its raping us all. Lol
@@Michael-qy1jz I dont disagree. Im just making the point that if we raise interest rates, everything will collapse, as it should. It doesn't serve the social unrest aspect well letting it collapse. I was also suggesting that the interest rates arent just given because thats whats wanted, its also a metric to the capital in/out of capital investments
As history shows economic cycles are created by the Fed, just saying lol
Everyone hates Greenspan. He’s the 1st fed head to open the can of worms
I was 25 years a lumber merchant in Australia. I relate so much to your take on economics. Later when I had some furniture shops we knew what the economy was doing way before we saw it in the media. Being an informally educated economist you have been spared the BS academic economics. I really enjoy listening to you; even though I do listen to lot of high flying economists, your take still stands up well because you do not go beyond what is known to you.
These gifts make me want to start my own TH-cam channel.
I remember in1965 when they started taking silver out of coins. My dad was mad and I ask him why. He said "they are going to steal our money". He saw his grandfather lose his saw mill and his money in the bank and his timber land to taxes. Dad saved to buy. The lessons of the 29 crash and the depression that followed was lost on following generations due to bankers and the educational system. We are back to where history has been many times through plans of the money lenders.. At this point we can only carry on.
Your Father and mine saw what Banks the Fed Rosevelt New Deal did to the small independent owners
I was thought young about the depression and what banks where all about
Thanks for sharing your story
Same thing happened to both sides if my family. They seized both farms and we became paupers, only just now recovering. I am first generation wealthy. My children will be suffer greatly.
@@FelonyVideos Don' you wish that they would listen. My kids also.
During the Depression around here, Drs and Lawyers took advantage at tax time to purchase much properties....nothing has changed it seems.
edward leroy I’ve said the same . They took the gold from coinage, then silver from coinage, then in 71 the gold standard , then copper from cents , then interest rates from bank accounts.
Much love. Happy to hear you enjoy the community on your channel. I like checking your views about the world economy from time to time. keep going. let's see what the channel will be in a few years.
I really enjoy your input about the economy. Keep up the good work.
Despite the economic crisis I still believe this is the best time to start investing
Nice words sir ✔️
Crypto is the future
I actually invest in crypto it's really profitable overtime
Bitcoin Trading is a lucrative way of making money
Trading Bitcoin has been a life changer for me
You are truly amazing. 100%genuine love this channel
I love the mail call part. well its all good but I love seeing you get nice gifts. Great videos
Thank You!
We appreciate you in Chicago 😎✌
You ROCK. Look forward to your vids.
great chill video. Nice job man. Thanks
Thoughtful gifts, nice.
FYI: In Terre Haute just called about fixing fence. Was immediately told they couldn't get wood. I hadn't asked.
Keep up the good work!!!!
Nice to see subs send you nice letters . I enjoy your channel
Yes it is. I check the mail once a week and i really look foward to it.
Wow! That first letter was quite a compliment. Replacing the education system. 👍
Yeah it was.
Absolutely needs to be done! The current system is designed to make employees, not to make entrepreneurs.. should be focused on making entrepreneurs!
ALL OF our problems are solved simply by transferring SS into gold (requires congressional action) and then going back to a gold standard. In the end, that is what will happen. Probably 10 to 1 to allow for leverage and wind up, which worked pretty good so far.
Perhaps a commodity standard dollar, where a bucket of commodities is the peg. Weighted similar to the s&p.
“That is so right on”
How is private investment being “crowded out”, interest rates are at rock bottom, so there’s plenty of money available.
Companies can borrow for next to nothing for investment.
They don’t invest, because there is a lack of demand, due to coronavirus related layoffs, and a fear of less demand.
Create demand, companies can borrow cheaply for expansion & the economy will grow.
But they do pay their executives 4000 times more than their avg employee. More inequality which leads to nothing good.
Trickle up economics
Greenspan: you guys have no clue how screwed you are. (Drop the 🎤)
Up till 2020, we have had massive cost of living inflation. Hopefully they can't steal our deserved DEFLATIONARY collapse !! If they achieve even higher cost of living inflation, all our discretionary income will be eaten away fast!! Reward savers or reward debtors!!!
So far debtors and gamblers are kings.
A lot of investment funds are hoarding cash. There will be more than enough time to get market high and then selloff. After that deflation short stage should still happen.
The government is the biggest debtor out there. They can afford to give tax cuts out
@@MrKongatthegates The Federal Govt doesn't have to tax at all, they can just print and sell debt.
Greenspan should be in jail !
top content
Maybe Alan Greenspan is saying the pandemic is a convenient distraction to occupy the news cycle so no one has to answer hard questions about the deficit spending, at least for a short while.
.. We need to start a movement to end the words "unfunded liabilities"... That shit WAS funded. Let's change the negative connotation geared toward social security as an "entitlement" as well... Unless of course we're implying that if you paid into it... You're ENTITLED to get paid back.
4:20 Absolute lol! Classic. Talk about a beat is worth a thousand words.
Inflation is a burden on the poor, everything becomes more expensive. Deflation is a burden on the rich, it reduces the value of assets and increases the value of debts. Now how entitlements are correlated to private investments, I haven't a clue nor had I ever heard anyone correlate the two.
Inflation is a benefit to the poor, although they don't, wages are supposed to keep up with inflation to offset the increased prices and make their debts easierto pay back. Inflation is a burden to savers.
@@UneducatedEconomist Yes, if you were to call corporations the poor, than yes, the poor benefit from inflation.
Funny to see Simon get more excited over syrup than silver...lol
2007 the federal reserve had made 17 quarter point short term interest rate increases and forecasting 3 more by beginning of '08? The inflation in resources had become a bubble because of the Beijing Olympics build? We are still paying for the birds nest!
Do I see a bit orange color in the sky there? Seeing any smoke from the fires?
Inflation has been here since America started using fiat munny.
Truth
Silver!
Do you think it’s possible the FED just said they would run inflation hot to try to get people to spend money? It’s not like they could lower rates. It’s like a stimulus without adding to the debt...
Yes that is what think. They are trying to get inflation by convincing people that there will be inflation
Yes. Actually printing money would make this crisis even worse and that's not what they want to do. They're fighting deflation comparable to the Great Depression, and like the Great Depression I think it'll be too little too late now.
The Chinese have changed 2020 to the year of the bat!
I'm as excited as you are seeing what's in the mail call tbh 🤣
Wow! He said that! Out of the crazy house a sane statement. But why not the issue with bailing out corporations that are closed anyway. Why point the finger at those that saved through payroll deductions. Point at printing presses.
They scared me into buying land.
Once my online business gets going, they scared me away to expat somewhere else with some land to escape the Fed and the US $.
Who did the first person to own the land buy it from?
what grade is the syrup?
Never let a good crisis go to waste
Cool dude 😎
Its also because Greenspan came close to criticizing Powell, without really criticizing him. Its a practice of " respect " is former Fed chairs never criticize the person in office. But Greenspan came close. He was trying to warn, without being critical. Your buddy Peter Schiff compared it to Greenspan trying to have a conscience, trying to get into heaven.
Atleast the the mail call is positive
We get it, you have a FULL life outside of your channel. Don't sweat it. 😎🙏
Correct me if i'm wrong, but if loans create deposits, doesn't that mean that investment is not limited by savings? Because, from what I understand, you're assuming that because the government will have to spend more and more on entitlement programmes, it will either have to tax more or borrow more, thus draining the supply of available savings in the private sector, which will force interest rates up and deter investments. But, once again i'm open to being corrected, does the crowding-out theory actually hold true if indeed loans create deposits?
Is that a 2002 Toyota Camry?
UE, I am sure you are one of the good guys. Greenspan? Well ... even bad guys can say good things, sometimes ;] My 2 cents? De-flation, Stagflation, Inflation, Hyper-inflation, melt-down. Greetings from the UK.
CLOs and Pension funds go hand in hand like peanut butter and jelly
Entitlement, is not social security. You worked for it, and paid into it. Entitlement is free programs. Food stamps, ebt cards, basic income. Section 8. All those things you didnt pay for.That you feel you should deserve. Dont believe something for nothing
Entitlement in the sense that you're entitled to it since you paid money into it. The term is not meant to be disparaging.
There is no sense, we were told back in the 30s, that it was a supplement to our retirement, and we were to have another source of retirement income. You maybe referring to the people now that think that social security will be all that they need for retirement. Our government wants people to be dependent on the government
10000 baby boomers retire per day ... double whammy to the economy - no taxes from labor coming in whilst withdrawing benefits due ... It seems to me the demographics are simply not there in today’s economy ...good luck
Friend and I were watching this, and neither of us got the connection between UE's comments about retirees and private investment. Anyone care to explain please?
Baffled. I think he is senile
Greenspan that is
@@MrKongatthegates at the same time, I got the impression that it was UE's interpretation of what Greenspan had said.
I thought the government borrowing after the tax cuts would crowd out investment than the stock market went way up. Fed keeps.buying the government debt keeping interest rates low so the crowding out never happens.
As a gen.X kid, I've been been dreading the bill come due from the baby boomers.
I keep a clipping from the paper dated 8/28/2005 on my bulletin board. The headline is”Greenspan says housing boom nearly over” this was from the meeting at Jackson Hole Wyo. we know what happened 3 years later. We may not like the man but he seems to know the deal(the truth).
Greenspan, 1997, on worker compensation and insecurity: "The performance of the U.S. economy over the past year has been quite favorable... A typical restraint on compensation increases has been evident for a few years now and appears to be mainly the consequence of greater worker insecurity..."
(from www.federalreserve.gov/boarddocs/hh/1997/february/testimony.htm )
In 1997 he's arguing in favor of worker insecurity and making workers live paycheck to paycheck so they'd be too afraid to ask for raises, which would help businesses. Literally workers are afraid to be fired and become homeless, so they wouldn't ask for more money. This is the economy Greenspan supported while he was the federal reserve chairman.
Good one
Sorry man, TH-cam has to many commercials. I was happy to support you from 100 subscribers to here. But this is my stop. Good luck Uneducated Economists.
I find the ads annoying to say the least. They only do it to the videos that are 10 minutes longer videos.
If you don't want to listen to a commercial, then you need only click "skip ad." Granted, a few you have to listen to entirely, but they're short. Compare a single click to watching regular commercial TV.
I've said for a while that boomer demand for fixed income is pressing down rates hard. 2018 was peak boomer retirement I think. By 2025-2030, as some of them pass away, demand for fixed income will smooth out IMO.
Wow Greenspan is still with us he must be at least 95 .
Something like that
👍👍👍👍
You called social security, programs. Its not programs, its one, the original plan. Social security. Medicare was added sometime in the 60's. It was,called. the great society. The term programs. Is the issue.
There..." ya" goe..."
Oh they've been monetizing debt to cover all of this crap...
Just a small background here...
I'm 35 and I can remember in the mid to late 90s, we have school teachers telling us point blank that you guys probably aren't going to see shit.....
These teachers some of which were baby boomers a lot of which were gen xers born in the mid-60s early 70s...
They talked about how they'll probably see something our older parents or the older of the boomers will definitely reap more benefits but really it's our grandparents that's going to see the most....
By the time it gets down to our age group there ain't really going to be nothing left and even at the time they were toying with raising the age to collect social security it's like today you can still collect it at 62 years old you just get less money if you want the full benefits of the full benefits yes you have to wait till you're 70 but a lot of people do it it either 65 or 67....
I believe wholeheartedly that those systems were set up as a means to motivate a population there again our grandparents's age groups to conduct a roaring post-war economy and this was their payoff their investment that they're collecting okay unfortunately they're dying off their children are benefiting and will definitely receive more than we will however that system is gone it's moving away....
ever since the late 80s and definitely through the 90s the majority of employers went from straight pension schemes in terms of retirement plans to 401K type of retirement plan where you're basically paying for a lot of your own retirement and thus it's not a real benefit....
here's the problem 401ks are largely stupid ass investments via they only make money when the market goes up which means they're subject to bubbles and they're also subject to the crash of the bubbles popping!!
Here's the major problem, in a world where you're lucky to make $11 an hour and you're still not really that fortunate chances are you're going to have to have a roommate and chances are that maybe you're very own parents to check in $10 a pay period into this investment that frankly you're not going to really be able to touch until you're in that investment for 5 to 10 years then you're only able to borrow against it even though it's your money to begin with the reality of it is is your investing in common stocks and in order to collect a dividend of 3 to $500 a month on common stocks you're going to have to have an investment as large as 75 to $85,000 people are lucky if their job even holds out for 3 to 5 years....
The mass majority of people are lucky if they have a job that lasts three months let alone 2 years because as we all should know by now the majority of jobs have become temporary jobs even if you're hired directly by the said company they'll lie to your face and tell you it's a full-time position it's permanent blah blah blah blah but the slightest thing goes wrong in the office and you're out on your ass they'll just if anything make up something to get rid of you!!
Then of course you have to consider the consequences of said investments such as most of the time those 401K plans that they're offering you specifically when the company talks about how they'll match you dollar for dollar and investment yeah really they're doing that because what they're selling you is their own shares it gives them another vehicle to buy their own shares and thus inflate the stock price so when that crashes out it's completely worthless and you've just wasted your money and time!!
And of course continuing with the consequences of set investment it's wise that you go and look at the company's financial State because the mass majority of companies in existence today are billions upon billions of dollars in long-term debt and they're not worth even the smallest of investments!!
whether it's private or public sector the truth of it is is the bill is going to come do someday we just don't really know the day or time that the people behind the debt are going to want to collect on this debt so you're going to see massive liquidations here's the major problem with liquidation....
Let's take a retail for example when a third of retailers are liquidating who's really left to buy up their inventory the market is flooded with liquidated inventory or inventory that is up for liquidation in other words companies like consolidated Inc that owns big lots they can only buy so much and they can only turn over so much of that merchandise so where's all this crap going to go eventually it's just going to be thrown away they're going to have to do that to take the bloat down in that set industry....
Basically we see in the same thing with the housing crash and I'm not talking about 2008 2008 was only merely a fucking announcement that there was a problem the problem really you could argue came out of the late 90s I remember seeing late night ads about lists of foreclosed homes that you can buy but I also remember that things really took a dive in 2004 and definitely by 2005 and it became common knowledge by 2006 that there is definitely a housing problem....
It was only after the announcement of 2008 the prices bottomed out and the truth of it is is going through 2009 and 10 we never really found the bottom of that market but I am aware that you could pick up a lot of houses for $5,000 $16,000.....
the price crashing out was the sheer fact that the houses were not worth but they were previously valued but also the fact that Realtors across the country got stuck with huge amounts of inventory they couldn't shift fast enough in any retail market when there's a product to sell and you're flooded with it you'd lower the price to clear it out as quickly as possible then only then you can start raising prices here's where it was rigged....
They never fully cleared it out they just started raising prices they slowly started to pass out credit again so the bigger income earners were able to come in and buy these places via a big loan and the overvaluing got worse and worse and guess what here we are today that market is still flooded many of these real estate companies still have holdings left over from the last time many of those have found their way to the auction circuit and they're being done away with but very very slowly here's the problem they're also doing a 180 and it's coming to a full stop....
in other words there's not enough people out there to liquidate these houses too so what that's going to create is even deeper problems when it comes to properties of all shapes and sizes and locations being underwater and yeah that actually does include commercial property as well!!
If you have no one to sell it too even if you lower the price then it just sits there and it becomes useless the idea would be that if you lowered the price to the point where people who save money could come in and buy something outright without the need for a bank and you did that on mass then the banking system cries that it would fuck them over technically it would but on the other hand it would actually be the quickest way to clear the market out in other words I would predict that over the course of the next 5 years you're going to see $300,000 $400,000 properties crash out to less than $20,000 and in many cases in certain areas they're going to crash out well below $10,000 you can laugh at that today but mark my words that's going to happen because I've seen it happen before...
the last time they ever valued the market they had $60,000 homes that they were selling for $170,000 they had $150,000 homes that they were selling for $330,000 but you want to know something they all crashed back especially through foreclosure you could pick those things up for $28,000 to $38,000!!
and modestly price houses that was going for $110 to $125,000 at the height of the bubble yeah when that crashed out you could pick those up for 16 to $25,000 I even seen a few out there for 13 so we came very very close we just never really found the bottom it was a pullback but it was not a full correction!!!
Do you agree with Steven Van Metre theory about how the dollar will rise?
I sure do!
When a central banker says the inflation outlook is negative they would usually mean they can't get enough of it. We are still in a world where the central bankers are constantly complaining about this. This is why this is a bit confusing, especially when a huge cohort of boomers are now retiring, this would normally be a deflationary pressure. But if non of these pensions are funded and the debt has to be monetized and this is somehow crowding out investment funding and real productivity then this would be inflationary wouldn't it? So which is it? I take the meaning of inflation being negative as upward pressure like in the 70's.
I also was initially not certain what the UE said Greenspan was saying. I went to the CNBC interview. My understanding is the same as yours. We're going to get too much inflation. The Fed will have no difficulty reaching its 2% average inflation target. The other interpretation, which I think is wrong, is that he's saying that inflation will not be high enough or, heaven forbid, might even be negative (deflation). When private investment is crowded out, not enough goods are being produced. Therefore, demand will exceed supply, causing price increases.
Apparently Greenspan isn't a fan of MMT. Otherwise he wouldn't care about entitlements or the debt. Wait till UBI comes.
watch the george gammon interview with jeff sneider and lyn alden dated sep 11 for some real good info on the fed and how it operates
Many seem to have misinterpreted "negative inflation," interpreting it 180 degrees opposite of what Greenspan intended. Perhaps this subject needs another video. The phrase "outlook is negative" does not help.
What does a social security check have to do with investment? Retirees consume most of those every month. Greenspan is gone from the fed, his buddies are all very conservative, he was always pretty conservative, he is probably uncomfortable with all the money printing. But maybe it was necessary
Retirees having money for rent means more private investment in rental units. Alot of retirees own but not all
u guys selling any 7 dollar 2x4's? lol i was just in home depot and a 7/16" sheet of osb is about 29 including tax. What a ripoff.
Not a lot but yes people are pay $7.19 per 2x4x8 std&btr kiln dried. Unbelievable to say the least.
The building sector cannot sustain those prices.
Regarding inflation, I agree, its coming, it, inflation ,should have been here years ago. with the doubling of the monetary system, that went outside this country. from 2008 to 2016. That inflation was put on hold. By the second expansion of the monetary system. over the past 6 years. That brought our spending, back to the US. Inflation,the increased cost of goods and services. has been here, it just wasn't counted correctly. The government would find that a product ,had gone up in price, the government would pick a lesser priced substitute. Not like in the past, 14 years ago. Where the government would count the price of the same item every time. Now the government switches items. Inflation , is the increase of the money supply . Increased Cost of goods and services is the result. pasta was a pound, now its 10. 12. 14 ounces. For more money. I would stock up ahead of inflation if I had the money. The problem now is. people are buying a couple extra items at the store, to replace what they had before covid. The cannery, is Shipping last years product and this years product has yet be harvested. Have you checked the weather yet. Its snowing in the grain belt. Lentels chick peas, peas, wheat, beans. The basic soup stock. Good luck this winter
Technology advances cause deflation
Be wary of taking advice from the man whom coined the phrase " increasing worker insecurity"
Drugs are bad ...mmm-K! ;)
Are you from Poland?
No. He live's in Oregon.
Honestly, I don't put much faith in Greenspan. I thought it was rather naive of him to believe that shareholders would right the wrongs of overvalued companies back in the 2006-9 financial crises. Even more, he flat out fired the very woman that warned him about all the derivatives that brought the market down back then too.
I guess they dont care too figure out police brutality and systemic oppression
The Economy was already headed towards a recession back in late 2019. Look up Repo Markets.
fortune.com/2019/09/26/the-feds-repo-market-bailout-is-a-sign-of-deeper-problems-that-are-getting-worse-over-time/
Crypto
Does negative inflation mean deflation? In this video?
No
And Alan is at least right about the BS part of the virus.
He’s not to be completely trusted but deflation in stock market makes sense. A lot of forces interplaying but that’s one issue can be predicted & democrats holding stimulus for 25% into local government & this issue.
Luv u 2 bro 😍 no homo
Inflation the way they look at it go to the grocery store!
Given Alan Greenspan's track record as worst fed chairman since inception, if Greenspan sees negative inflation surely you should expect hyperinflation. Think about how supply chain disruptions in lumber have caused prices to rise. Lumber isn't the only commodity seeing increases, food prices have also risen. You, uneducated economist, may not have the formal education but you have greater reasoning and a far more open mind than Alan Greenspan ever has. Whatever Greenspan predicts, expect the opposite.
A negative inflation outlook, meaning that it will be too high for comfort. The examples you've cited would reinforce what Greenspan is saying.
The federal reserve MUST embrace deflation or lose control! Greenspan looked like my grand dad. The old economist has an angle?
William mcchesney Martin! Was the bad one?
April 23 , 2003. Forbes. Greenspan is no McChesney martin.
Without Martin you have no petrodollar?
Do not forget to transform for your HEX getHEX.info much love!! Keep Stackin
He looks like hes about 95. And what does he mean we dont know much about the coronavirus? We dont know how the economy is going to go I suppose thats true. Hopefully the vaccine helps because its a shit show all around right now. Its pretty bad
What does his age have to do with anything? Your remark is ageist.
Joshua Lee I saw an epidemiologist on some news show recently, I think it was Fareed Zakaria, the doctor said the same thing about we do not know much about the virus. From what I could gather he was saying this virus like others is a strain of another virus and this particular strain has not been around long enough to know that much about it.
@@fightsports66 its been 9 months so we know a lot now. We know its deadly and airborne. The worlds top scientists have been working like mad. Trump created a lot of confusion but the science is pretty straight forward. Even Greenspan got sucked in by all the lies and BS it looks like. Should have just listened to Faucci from day one he has been consistent and correct from the beginning
Dementia- sucks to be Alan
He's full of shit. Social security and most entitlements are funded by workers taxes and if taxes fail to cover it, the government steps in and fills the balance. Private businesses don't fund social security. These businesses are sitting on government bailout cash. They can invest it if they want to.
scamdemic
Save yourself start buying some Bitcoin! 🤓
🤮
Start buying canned food
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