Former Fed Chair Alan Greenspan dead at 100 years old

Alan Greenspan, revered as one of America’s most notable economists and former Chairman of the U.S. Federal Reserve, has died.

Greenspan was 100 years old and married to veteran NBC correspondent Andrea Mitchell.

Paying tribute to Greenspan, the U.S. central bank issued a statement which read: “He brought rigorous analytical discipline to monetary policymaking and helped establish the credibility that remains one of the Federal Reserve’s most important assets.”

At 19, Greenspan studied economics at New York University and went on to join the Board of J.P. Morgan.

Before President Ronald Reagan appointed him as Chairman of the U.S. Federal Reserve in 1987, he headed the Council of Economic Advisers.

Greenspan headed the Federal Reserve for twenty years (1987-2006) and is responsible for ushering cheap credit to solve financial crises, which was called “quantitative easing.”

An advocate of low interest rates, Alan Greenspan served both Republican and Democratic presidencies. He praised Bill Clinton for his focus on long-term economic growth.

When stock markets crashed in 2000 due to the dot-com bubble, Greenspan put it down to what he famously called “irrational exuberance.”

He was undoubtedly one of the great central bankers of the 20th century. 

Some memorable quotes from the great man.

1. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process

2. The number one problem in today’s generation and economy is the lack of financial literacy.

3. The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.

4. The problem we face today is not one of too little knowledge but of too little willingness to act on what we know.

5. Finance is almost wholly behavioural animal spirits.

6. Our market system depends critically on trust-trust in the word of our colleagues.

7. Unlike stock markets, it is not the job of the Federal Reserve to fearfully anticipate recessions. The Fed acts as a moderating force upon animal spirits so that the economy neither overextends during bouts of euphoria nor descends into panic during times of stress.

8. I view cryptocurrencies as an asset class too dependent on the “greater fool theory” to be a desirable investment.

9. If you rate me on my irrational exuberance forecast, I get a C. But analytically it was describing a process that I thought we had to be very concerned about.

10. Once a bubble emerges, it is difficult to do anything to stop it that won’t have a major negative impact on the economy. The best thing to do is to let it run its course and address the consequences when they occur.