Reply #16: Seven Trends Spell A U.S. Financial Crisis [View All]

[54anickel]

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/04-04-2006/0004332868&EDATE=

NEW YORK, April 4 /PRNewswire/ -- "Right now we face some powerful
negative forces that could lead to a dollar panic, a stock market crash, or a
banking crisis," said Investment U (http://www.investmentu.com) Chairman
Mark Skousen in a lecture recently at Columbia University.

"The basis of my remark," says Skousen, "is a warning issued by none other
than former Fed Chairman Paul Volcker. A year ago he warned that 'The U.S. is
skating on increasingly thin ice... The circumstances seem to me as dangerous
and intractable as any I can remember, and I can remember a lot.'"

Whether that thin ice breaks, cracks or holds, says Skousen, depends on
seven trends that are driving the U.S. economy. "It's a medley of economic
woes," he says, that include:

-- An overreacting Fed, switching from "easy money" to "tight money." The
Fed has been a major source of instability in the financial system. For
example, Greenspan was chairman for 19 years, and switched policies seven
times! The Fed often overshot its target on both ends - raising interest
rates too high in 1989, 1994, and now, and pushing them too low in 1992
and 2003.

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