Alan Greenspan Changes Quotations

If we can maintain an adequate degree of flexibility, some of America 's economic imbalances, most notably the large current account deficit and the housing boom, can be rectified by adjustments in prices, interest rates, and exchange rates rather than through more-wrenching changes in output, incomes, and employment.

When we see significant, dramatic changes ... we are skeptical as indeed we should be, ... bring together all of the facts we can marshal and the most sophisticated insights to explain those facts that we can.

Let me say this anyway on the record: We do not and have not been targeting stock prices for the purposes of endeavoring to stabilize this economy, ... We react if and when stock market price changes impact on the economy. We respond to the economy.

As the value of assets and liabilities have risen relative to income, we have been confronted with the potential for our economies to exhibit larger and perhaps more abrupt responses to changes in factors affecting the balance sheets of households and businesses,

With regard to margin requirements, studies suggest that changes in such requirements have no appreciable and predictable effect on stock prices, ... Nonetheless, the Federal Reserve recognizes that considerable risks can be involved in the purchase of equity on margin, especially in volatile markets, and believes lenders and borrowers need to assess carefully the risks they are assuming through the use of margin.

Changes in consumer confidence will require close scrutiny in the period ahead, especially after the steep falloff of recent months,

The changes in the budget outlook over the past several years are truly remarkable, ... We need to resist those policies that could readily resurrect the deficits of the past and the fiscal imbalances that followed in their wake.