Alan Greenspan’s Testimony On November third, 2005, Alan Greenspan spoke before the Joint Economic Committee in the United States Congress. He opened with remarks reviewing the state of the economy during last time he spoke to that committee in June, mentioning the economic acceleration that occurred in the early summer. He then moved on and discussed the downturn that occurred in late summer and early autumn. The first event that he covered was Hurricane Katrina and the economic effects that it had. crude oil prices had already moved higher in August due to a growth in world demand that continued to outrun supply, but when the hurricane hit the Gulf Coast there were widespread disruptions to oil and natural gas production. This cased the price of West Texas Intermediate crude oil above $70 per barrel. He then mentioned the second natural disaster, Hurricane Wilma, which caused further damage and destruction to the energy distribution and production systems that are based in the Gulf. Mr.
Greenspan also mentioned that these damages to the energy production region affected the whole country, as the facilities were only operating at less then 50 percent of their levels before the natural disaster, which depleted the entire nation’s supply. As a result of this shortage, it was necessary for there to be releases from the nation’s petroleum reserve, which helped the price of gasoline decline to 60 cents below its peak during the crisis. At this point Mr. Greenspan also noted that even though drivers have become more economical in their transportation practices since the fuel shortages and price hikes, and therefore the demand for gasoline has lowered slightly, it will take some time and a considerable increase in the fuel economy of vehicles to change the amount of fuel that is used by the country and avoid such a situation again. At this point he moved on to discuss the need to expand our country’s ability to import natural gas. He pointed out that even though the crude oil prices fell, natural gas prices remain high. This could be a problem and stress the market in a colder than average winter.
The Term Paper on Introduction To How Gas Prices Work
High gas prices can make you stop and think about your commute. See hybrid car pictures to see models that save you money.In May 2008, average gas prices in the United States approached, and in some places passed, $4.00 a gallon, shattering records. But this was nothing new to American consumers. May was a month of records that broke one after another, and that came on the heels of months of ...
Moving away from discussing the hurricanes and fuel situations, Mr. Greenspan addressed the issues of employment. Although the September employment report had a loss of 35,000 jobs, he said that there is a stronger underlying pace of hiring. In the retain area, he mentioned that spending was lower in September, and that recovery will be gradual due to the increased energy costs. Though Mr. Greenspan mentioned that long term prospects remain positive for the economy, he went on to discuss the uncertain outlook in inflation. He remarked that the low inflation that the country has experienced in the recent past has been due to the rise in innovation paired with a restraint in labor costs caused by a shift in the world’s workforce. He said that while this shift has caused labor costs to be low, economic systems will evolve. They will change from being centrally planned to market-based, and the supression of cost growth and world inflation will at some point will end.
Since it is a dynamic process that will occur and is occurring over an extended period, the extent and direction of these trends will need to be monitored carefully by the world’s central banks. He concluded by discussing the situation with the federal budget after Hurricanes Katrina and Rita. He mentioned that although spending rose rapidly last year, the budget deficit was almost 100 billion dollars less than had been earlier anticipated. Even without the hurricanes, he projected that the budget is unlikely to improve until constraints are set. With growing health care costs, federal spending on health and retirement programs is likely to reach an unsustainable level. Mr.
The Term Paper on Inflation in Bangladesh
1. Introduction Inflation is a general increase in prices and fall in the purchasing value of money. “Too much money in circulation causes the money to lose value”-this is the true meaning of inflation. What is Inflation. The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, ...
Greenspan finished by discussing this budget problem further, stating that the government should only make promises that it can deliver, and that changes in budget strategy for the nation overall will be difficult but necessary for Congress..
