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Greenspan's Gloom

This article talked about Federal Reserve Chairman, Alan Greenspan's appearance before Congress this last Wednesday, April 30th. According to the author, the purpose of this meeting was to review the fine details of Greenspan's most recent monetary-policy report. But apparently Mr. Greenspan used this open opportunity more or less to review our current post-war economic outlook. The message he gave wasn't so much of a positive one. If anything, it was one of caution and uncertainty. He mentioned that although consumer spending has become less apprehensive, it is still at a very mild, neutral stage. What Greenspan seemed to make the biggest emphasis on was business investment. He claims that the recent lack of confidence in business spending has been the key to what's holding our economy back. The latest assessment had offered some hope, as many of its pre-conditions for an upturn are now in place, such as oil prices are falling back, share prices are rising up, and improved profitability is in prospect for many companies. Another thing the chairman expressed concern towards was the possibility of deflation. He confirmed that any more drops in the inflation rate could make risks of deflation very serious. He also stated that even if the inflation rate dropped to zero, it would still have a negative effect because it would delay any progress in the area of business investment and undermine profit margins. And of course these factors are those that Greenspan claims are the basis for growth. The article addresses the fact that Greenspan's show of concern must be somewhat crucial in respect to the fact that Ben Bernanke, one of his colleagues, had just recently done a lengthy speech focusing on the same matters, assuring that they had everything under control. Despite the uncertainty though, Mr. Greenspan did confirm that we have only small amounts of evidence on the state of our economy, as the war has jus

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