Here is more fun with former Fed Chairman Alan Greenspan, again from those recently-released bubble-era FOMC transcripts. To set the stage, we’re back in the dying days of the technology bubble in late 1999. The assembled Fed officials’ discussion is turning to the existence of an equity market bubble, the role therein of foreign capital, and how and when this precarious economic adventure might end.
It is, in other words, serious stuff. So let’s allow the action from October of 1999 to unroll before us, just like we were there at this crucial moment in recent economic history …
MR. PRELL. Just to grab onto one more string, though, it is possible that the buoyancy of the dollar has had something to do with what some might argue was a bubble situation in the equity market. So people may have exaggerated ideas of the prospective returns from these investments.
CHAIRMAN GREENSPAN. Foreigners?
MR. PRELL. Domestic and foreign investors. But foreigners are playing a role in this, investing in what they perceive to be very, very profitable U.S. ventures.
CHAIRMAN GREENSPAN. Shall we break for coffee before it gets frozen?
Alan Greenspan. A man who really knows where his towel is.