Shocking Admission & Denial from Alan Greenspan
The Peter Schiff Show Podcast
Peter Schiff
4.6 • 5.9K Ratings
🗓️ 28 February 2015
⏱️ 24 minutes
🧾️ Download transcript
Summary
* Government released revised estimate for Q4 GDP
* Initial estimate was 2.6; revised down to 2.2
* Economic growth dipped from 5% in Q3 to 2.18% in Q4
* PMI was expecting 58.7 but plunged to 45.8, indicating contraction
* Alan Greenspan commented that the U.S. economy is weak
* Greenspan cites declining U.S. productivity
* Points to declining gross domestic savings brought on by entitlement programs
* Greenspan refuses to blame Fed policy for productivity and savings declines
* He predicts continued low interests rates to create the illusion of wealth
* In 1966, Alan Greenspan blamed the Fed and their cheap money policies for stock market bubble and economic imbalances
* Today, he still believes this to be true, but no longer cares about the consequences of reckless economic policy
* The Fed's job now is to just do whatever it takes to postpone the pain
* Inflating bubbles with the certain knowledge that the outcome will be bad, while pretending that they will eventually raise rates
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Transcript
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| 0:00.0 | Hi everybody, it's Peter Schiff. This is Friday, February 27th, 2015. Today the government |
| 0:07.9 | released its revised estimates for fourth quarter GDP. Remember, when the last time I did |
| 0:15.4 | a video blog, they came out with the initial estimate, which was 2.6. At the time I said, |
| 0:22.4 | I thought the number would likely be revised down closer to 2%. That is in fact what |
| 0:27.8 | happened. They revised it down to 2.18. I think it was the actual number. Of course they |
| 0:32.8 | reported it. They rounded up to 2.2. But the market pretty much shrugged off the bad news. |
| 0:39.0 | Maybe because they had been bracing for even worse news. I think the expectation was 2.1. |
| 0:45.3 | So they reduced it slightly less than people had been expecting. Although remember, they're |
| 0:52.0 | going to revise it again next month. So I still think there's a good chance that will end |
| 0:56.8 | up with a one handle on fourth quarter GDP. But what's really significant is the slowdown, |
| 1:05.0 | the rapidity of the slowdown from 5% in Q3 to 2.18% in Q4. And the only reason that the |
| 1:15.7 | number is so high is because they assumed that inflation was so low. They assumed an |
| 1:21.8 | annualized inflation rate of 0.1. When they came out with the initial estimate, they assumed |
| 1:29.3 | zero inflation. Annualized inflation of zero. So now it's just 0.1. And even with an inflation |
| 1:36.4 | rate so low, we still barely got to 2.2% on fourth quarter GDP. Of course, all of the economic |
| 1:46.2 | data that's come out that is pertinent to January and February that is going to go into |
| 1:52.9 | computing first quarter GDP has been horrible. Particularly horrible was today's release |
| 1:59.1 | of the February Chicago purchasing matters index, the PMI. They were expecting this index to register |
| 2:06.7 | 58.7. Instead, it plunged all the way down to 45.8. Now anything below 50 indicates contraction. |
| 2:17.6 | We're at 45.8. This monthly drop is the biggest monthly decline since October of 2008. |
| 2:26.4 | Remember it was going on in October of 2008? This is the financial crisis. This is the beginning |
| 2:32.1 | of the whole collapse. You have to go back to October of 2008 to find a worse PMI decline than |
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