The implicit term extension deal for Greenspan in 2003 (by two years) was that he would “listen” to the new Governor from Princeton.

The result; monetary inflation in the asset markets (credit, real estate, in particular) developed in a virulent form (including its well-known aspect of rampant financial engineering).

The NBER now dates the US recession as starting in the fourth quarter of 2007.

Indeed, during late Spring and early Summer (2008) the Fed signaled that rates could increase in response to the “inflationary effect” of the oil market bubble at that time.

The full extent and nature of that disaster would emerge with long and variable lags after key dates in the monetary inflation process.

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