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The Myth of Fed Omnipotence
GAINESVILLE, Ga. / March 31, 2011 -- According to the latest Atlantic headline, "Everyone Is Laughing at Alan Greenspan Today," but the joke is really on those who believed he could "Save the World" in 1999 and put him up for sainthood in 2000 and, again, in 2007. As Elliott Wave International's Pete Kendall wrote, "The divide between the Fed chairman's popularity and central banks' historic post-mania impotence is a recipe for grand disappointment… The time has come for Greenspan's image to take it on the chin."
People forget that it was only a few short years ago that Greenspan was lionized on the cover of Newsweek magazine ("The World According to Greenspan, September 24, 2007). At that time the Dow Jones Industrial Average was days from its all-time high and the October 2007, issue of The Elliott Wave Financial Forecast wrote, "There is no denying the height of Greenspan’s public standing." EWFF added that the Greenspan worship "signals a likely reversal. The decline will probably transform nearly universal Fed worship into demonization. As the head potentate of the great bull market, Greenspan’s role will probably morph into the work of a great satan." Though Greenspan is not being villainized to this extent, analysts at Elliott Wave International believe the turn is still young, and that the laughter could turn to outright anger.
To speak with EWI's Pete Kendall about why the Fed bashing is still a long way from over, or for a copy of the research referenced above, contact Alexandra Lienhard at 770-536-0309, alexandral@elliottwave.com.
About Elliott Wave International (EWI) Based in Gainesville, Ga., EWI is the world's largest market forecasting firm that specializes in Elliott wave analysis, a form of technical analysis based on crowd psychology and pattern recognition. EWI's analysts provide around-the-clock forecasts of every major market in the world. Learn more at www.elliottwave.com.