When Dr. Alan Greenspan became chairman of the Federal Reserve, he moved from the world of rhetorical economics to the world of action. His most recent memoir attempts to make sense of how the financial crisis of 2008 came to be and how we can better predict future crises, along with the role of gold in a global monetary system.
Economics is an ironic science. You can be perfectly correct about various phenomena in general, but offer completely wrong predictions in detail. Nevertheless offering correct predictions is still a significant skill, even if your theories are wrong.
I can’t tell you how many talking heads I’ve watched in the media recently touting the strong dollar. Sometimes I really wonder whether Homo sapiens are an intelligent life form. Remember this is the same species that created the Tulip mania … and the tech, and real estate bubble.
During his testimony before Congress this week, Federal Reserve Chairman Bernanke made it a priority to dampen the growing concern that the unprecedented growth of the Fed's balance sheet presents great risks to the economy.
The majority of investors are usually wrong at turning points. Many investors are becoming impatient with gold selling into an oversold panic in the miners and looking for the latest fast money scheme in mortgages or real estate. Be careful of following this emotional move.