-->Sinclair-Kommentar zum gestrigen Auftritt
Chairman's statement rings loud
  Author: Jim Sinclair
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In this corner in the pink trunks weighing 131 pounds (soaking wet), we have the present Financial Heavy Weight Champion of the World, the Chairman of the US Federal Reserve, Alan Greenspan.
In the opposing corner in the paisley trunks, we have the challenger from academia, Governor of the US Federal Reserve System, the Princeton Bomber, Professor Ben Bernanke weighing in at a whopping 153 pounds.
Gentlemen, there will be no punching or slapping below the belt. At stake in this world-class event is nothing less than command of the bucolic, walnut-lined, imperial Federal Reserve board room.
Markets can't be too happy with the airing of what amounts to be the Federal Reserve's dirty laundry in public nor does this speak of the iron control which has always existed under one man - Alan Greenspan.
This was predicable when the largest financial supporters of the Bush Administration got skinned alive after being long the bond market. It was the Fed that pulled the rug out from under their illogical exuberance in the bond market when the discount rate was cut only one half of what was expected.
The Fed was therefore blamed for trashing the concept that it would print money to buy all maturities of Federal debt. After that, it became apparent that the Fed was not going to use its previously failed non-traditional means to pave the road with gold for the bond brokers, and that it had failed to expand monetary aggregates at a rate that would impact annual rate of growth positively.
The Fed under Alan Greenspan was not cooperating with the incumbent president by printing money wildly thereby supporting the re-election of the incumbent. Every Fed Chairman has pumped the economy to elect the incumbent since the Fed was invented. It was clear to me that Greenspan is on his way out of the Fed regardless of what the world believes and what President Bush said.
It was predictable that some very rich, financially savvy Republican would look at the annual rate of growth of monetary aggregates in a down trending channel since December of 2001 until last month's report and say,"What the Hell."
Governor Ben Bernanke correctly supports rate targeting of inflation. Alan Greenspan may be smart but he is no warrior. He has been suckered into going public with a secret strategy whatever that is.
Now if the economy hiccups on the way to November of 2004 - as it certainly must in the face of increasing interest rates - his secret policy will be blamed versus his rejection of publicly targeting inflation rates which Greenspan has now written off. He has been suckered into throwing an important tool out of his bag of secret tricks. His Chairmanship is coming to an end.
This is not good for a dollar that has gone higher on hot air. This is not good for an economy that is looking for strong, consistent and united economic leadership for a business recovery.
The following statements are from Chairman Greenspan who I believe was suckered into making them. Now the US economy either continues to grow or Greenspan has only one choice and that is to go.
1/"Some critics have argued that such an approach to policy is too undisciplined - judgmental, seemingly discretionary and difficult to explain.''
2/"That any approach along these lines would lead to an improvement in economic performance, however, is highly doubtful''.
The person he was directing the criticism at is Governor Bernanke.
These two simple statements will be considered the low point of the Chairman's leadership and his undoing IMO.
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