In a recent interview with Charlie Rose, the ex-Fed chairman expressed deep concern about the economic state of the U.S.
When asked whether he was concerned about inflation in this country, Greenspan flatly responded, “Very much so, yes.”
Greenspan went on to expand on that answer, insisting, “History tells us that when you go through a period such as this, with huge amounts of liquidity in the system … which – at the moment – is not being used at all, that eventually it takes hold and it begins to move at a price level. I don’t know a single economist or any member in government who deals with this area, who isn’t worried about that issue.”
Greenspan also corrected Rose, who assumed the rate of inflation is incumbent upon the price of/demand for food and fuel, and other commodities. According to Greenspan, it has more to do with the country’s rate of “liquidity” – the ratio or abundance of a good/commodity, in relation to the amount of money in a specific economy.
Here’s a video clip of the interview:
