Greenspan says Fed balance sheet an inflation riskWASHINGTON (Reuters) - Former Federal Reserve Chairman Alan Greenspan said on Friday that the Fed risks igniting a burst of inflation if it does not withdraw its extensive support for the economy at the right moment.
"You cannot afford to get behind the curve on reining in this extraordinary amount of liquidity because that will create an enormous inflation down the road," Greenspan said at a forum hosted by The Atlantic magazine, the Aspen Institute and the Newseum...
...The Fed has said that with high unemployment and a record level of factory idleness, none of the pressures that would ignite inflation is on the horizon. A government report on Friday that showed a weaker-than-expected job market in September is likely to provide additional support for that view.
Greenspan said the economy is "undergoing a disinflationary process," and stressed that the Fed faces no urgent need at the moment to unwind its monetary stimulus...
That statement in bold should scare the hell out of everyone...
