Former Fed Chairman Issues A Strong Warning About Bonds

Former Fed Chairman Alan Greenspan issues a strong warning about bonds

There are varying opinions of former Fed Chairman Alan Greenspan. Greenspan is the former Chairman of the Federal Reserve and a world renowned economist who served as chairman of the Fed from 1987 to 2006.  He’s noted for many accomplishments over his illustrious career including helping to prevent the 1987 stock-market crash from becoming far worse, but after a strong economic period in the 90’s came the mortgage crisis and Greenspan’s detractors blame his hatred of financial regulation as a big reason for it.  Most notably however, Greenspan is remembered for his phrase: “irrational exuberance” which he coined in 1996 during a speech in which he warned about inflated, over-blown asset prices in the equities market, specifically in technology stocks. Those comments came right before the dot-com bubble. When the dot-com bubble exploded in the early 2000’s many technology companies collapsed and disappeared. The combined market values of 280 stocks fell by nearly $2 trillion dollars when the dot-com bubble burst. That’s why Greenspan’s most recent comments about the bond bubble about to break because of “abnormally low” interest rates have gotten so much attention by investors. 

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