July 1st Post #2: Alan Greenspan says Quantative Easing a failure!

In a massive critique of the US Federal Reserve and Ben Bernanke, former Chairman Alan Greenspan appeared on CNBC and declared that the Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports.

Greenspan also said that the $2 trillion in quantative easing over the past two years had done little to loosen credit and boost the economy.

• "There is no evidence that huge inflow of money into the system basically worked. It obviously had some effect on the exchange rate and the exchange rate was a critical issue in export expansion. Aside from that, I am ill-aware of anything that really worked. Not only QE2 but QE1."

Greenspan went on to say he "would be surprised if there was a QE3" because it would "continue erosion of the dollar."

Stunning comments, to be sure, but you can bet the farm there will be more stimulus.  It will simply take another form.

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