Greenspan: Economic Hitman

Welcome to the aftermath. A short week ago at this time our countries favorite doomsayers were hard at work painting a Rembrandt of the market collapse that wasn't. The dow has since recovered and will be very close to making up the ground it lost by the time today's rally is over. What started in China spread like the avian bird flu across the pacific and took hold of investors causing a momentary pandemic. The dow was shedding points faster than the automated systems could keep score....100...200...300....400...when will it end!! Yes, it surely was reported to be the end of this society. 200+ years had passed since the 'buttonwood agreement' had established the NYSE in this country, and it was all collapsing at the hands of monetary tightening in China. Or was it......

Retirement can mean different things to different people...some prefer golf and martinis, others enjoy European travel and exotic cheese, for some its a time to reflect on this world and pass along tales to the future generations, others prefer economic assassination...to each their own right? There's a motto in the mob that 'once you're in, you can never get out'. Well, I think the fed is much the same. Despite the fact he's moved from his leather Herman Miller in the corner office to the lazy-boy on the front porch Greenspan still commands his army with the breath of his words and can instill fear greater than an idle threat of 'cement shoes' and a swim with the fishees in the east river. So you ask, why would he do it? Here's why....

It is no secret at present that the Chinese are manufacturing their economy. There is ample money supply available, exponential growth of speculative inflows of foreign capital, and generous income tax rates on capital gains all have led the country to YOY double digit expansion (Shanghai's leading index doubled in only a short couple of months). Oh, and did I mention they peg their currency? Yes, that seems to be a threat to fairness in the whole import/export game the world plays now doesn't it....Well, the US isn't one to play by someone else's rules. No, no, we must not let that happen. But who can we call? That's right, our ole buddy Al.....

The old saying goes, 'If the US economy sneezes, the rest of the world catches a cold'. Well no one understands this better than Greenspan himself. If the US can 'happen' to slow at an inopportune time (say a time when a country is trying to employ monetary policy of their own to help cool their overheated economy, like China was doing last week) it would pinch off resources and cast an immediate shadow across the global market place. A hint of recession as the product of tightening profit margins is all it took.....the dragon was slayed!!