The oracle speaks

This is just too much:

"The human race has never found a way to confront bubbles," former Federal Reserve Chairman Alan Greenspan said Thursday in reference to the euphoria that can precede contractions, or reactions, like the current market turmoil, according to a published report.

No Alan, but the portion of the human race classified as "governmentis parasitis," to which you belonged for lo so many years, has found many a way to make bubbles far worse than they would be otherwise.

But wait… That was just the first graf of the article.  Here are the second and third:

Greenspan, speaking to economists in Washington, D.C., compared the turmoil to that of 1987 and in 1998, when the giant hedge fund Long-Term Capital Management nearly collapsed, The Wall Street Journal reported on its Web site.

"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock-market crash of 1987, I suspect what we saw in the land-boom collapse of 1837 and certainly the bank panic of 1907," Greenspan said at the event organized by the Brookings Papers on Economic Activity, according to the Journal.

Amazing how he describes events in which he was an active participant with the same sort of scholarly detachment as events 170 years ago.  But here's my favorite part of the story:

Greenspan, now a private consultant, said euphoria takes over when the economy is expanding and leads to bubbles, "and these bubbles cannot be defused until the fever breaks," the Journal said.

The man set an indoor record for mixed metaphors within a simple declarative sentence of ten words or less.  At least this is a short article and we're nearing the end:

Bubbles can't be defused through incremental adjustments in interest rates, he suggested, the paper reported. The Fed doubled interest rates in 1994-95, and "stopped the nascent stock-market boom," but when stopped, stocks took off again. "We tried to do it again in 1997," when the Fed raised rates a quarter of a percentage point, and "the same phenomenon occurred."

He conveniently neglected to mention the phony "tightening" of the current decade that he oversaw.  As the late great Kurt Richebacher pointed out many times, even as interest rates rose during this period, the money supply grew as well, fueling the housing mess we're living with now.

Expect a lot more of these oracular pronouncements from Greenspan in the next few days — he has a book coming out.  (My God, a BS campaign from Greenspan this month coinciding with a BS campaign about "the surge" and a BS campaign about the "threat" from Iran — are we to be spared nothing?)  At least some wag at Amazon had the amusing idea to pair his book with the Bill Bonner-Lila Rajiva release Mobs, Messiahs, and Markets for an extra discount.