Greenspan: Recession odds 'clearly rising'

Dec. 14, 2007 at 3:02 PM

WASHINGTON, Dec. 14 (UPI) -- Alan Greenspan, former chairman of the Federal Reserve, told a Washington interviewer that the odds of a U.S. recession are "clearly rising."

It's too early to say, but, "We're getting close to stall speed" in economic growth, he said on National Public Radio.

Greenspan was eager to strike down criticism that the Fed had played a major role in causing the housing problem by keeping interest rates low.

"We've had housing bubbles in two dozen or more countries around the world. Everybody's long-term rates have gone down."

He said global forces beyond the Fed's control had led to the U.S. housing meltdown.

"We concluded that the monetary forces that were arising in the world globally had become so overwhelming, relative to the resources of central banks, that we had effectively lost control of long-term interest rates and the forces directing higher prices and homes," he said.

Asked if the Fed could have prevented, or eased, the U.S. housing bubble, he said, "There's only one thing we could have done -- cutting off short-term credit. But that would have broken the back of the economy."

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