Greenspan’s Bubbles

The Age of Ignorance at the Federal Reserve

Before you pick up Alan Greenspan’s latest memoir, The Age of Turbulence, it may be a good idea to get your hands on this title first.

Greenspan’s Bubbles is an obvious reference to the recent economic calamities which have been blamed on the former Federal Reserve Chairman. It serves as a blistering anti-thesis to the Maestro’s policies over the decades which the authors have pointed out as the main reasons why America and its people are in so much economic trouble today.

Much of the book concentrates on the recent technology bubble that gripped investors early this decade. In a blow-by-blow narrative fashion, the authors have detailed very carefully numbers and events that led to the speculative bubble and how they tie in with the Fed’s fiscal incompetence. This includes the Federal Reserve’s oversight in injecting liquidity into the market at a time when people were irrationally exuberant – to borrow a term that Greenspan coined himself. There is also a chapter on the very recent sub-prime mortgage crisis and the property bubble.

The work is relatively short and can be read cover to cover in less than a day. Nevertheless it makes for an intriguing read and offers a very different view of the man who everyone else is singing praises for.