Negative rates, rising gold prices, recession in the US - former head of the US Federal Reserve Alan Greenspan (Alan Greenspan) spoke about the current situation in the financial markets in an interview with CNBC.
The American CNBC channel discussed with Alan Greenspan (93 years old) the situation in the US economy and the possibility of starting a recession. It was Greenspan who led the Fed from 1987 to 2006. In his opinion, the stock market has a decisive influence on economic development.
“The effect of the welfare effect on the economy cannot be underestimated. For example, when the stock price drops, the Americans feel poorer, which means they start buying less goods and saving more. The growth of the S&P 500 leads to an increase in the US economy by 1%. Therefore, it is not surprising why the Central Banks are doing everything possible so that the shareholders of the companies remain in a good mood. ”
One of the reasons for the fall in interest rates, Alan Greenspan calls an aging society. He expects the introduction of negative rates in the United States. In his opinion, 30-year government bonds and yellow precious metals have good prospects. People want to be sure that in 20-30 years these assets will retain their value. Everyone wants to ensure their old age and live in retirement with dignity.
It is worth recalling that back in 1966, Alan Greenspan wrote a book entitled "Gold and Economic Freedom." This happened long before taking office of the head of the US Federal Reserve. One of the statements in this book has become the most popular and well-known in economic circles: “Without the gold standard, there is no other way to protect savings from alienation through inflation. Without gold, there would be no reliable means of preserving value. ”