Friday, April 11, 2008

Volcker's Speech

by Calculated Risk on 4/11/2008 04:52:00 PM

For those that missed Volcker's speech this week, it is now available on YouTube in five parts. I've also added a speech Volcker gave in February 2005 that was both prescient and still relevant to the crisis today.

Volcker: Part 2

Volcker: Part 3

Volcker: Part 4

Volcker: Part 5

Volcker in February 2005: Circumstances "dangerous and intractable"

Paul Volcker

Click image for video.Former Fed chief Paul Volcker spoke in Feb 2005 at the second annual summit of the Stanford Institute for Economic Policy Research. In his keynote speech he warned that the nation was facing 'huge imbalances and risks'.

A few selected excerpts:
"Altogether, the circumstances seem as dangerous and intractable as I can remember."
"Boomers are spending like there is no tomorrow."
"Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security."
"I come now to the heart of the problem, as a Nation we are consuming and investing, that is spending, about 6% more than we are producing. What holds it all together? - High consumption - high leverage - government deficits - What holds it all together is a really massive and growing flow of capital from abroad. A flow of capital that today runs to more than $2 Billion per day."
"What I'm really talking about boils down to the oldest lesson of financial policy in Central Banking: A strong sense of monetary and fiscal discipline."