Stock markets are diving almost everywhere. Families are losing their homes. The dollar is in the tank. The new Fed Chairman, Bernanke, has nothing he can work with: If he lowers rates, the dollar will collapse. Inflation will zoom from the cost of imports. The stock markete will dive further. Bernanke's hands are tied.

Who brought about this situation? Alan Greenspan with help from the adminstration he served, Bush's.

Greenspan lowered rates to about 1.5% on fed funds in order to save his Wall Street friends who were in a liquidity crunch from the failure of the dot.coms. Result: Residential housing prices skyrocketed. People paid exhorbitant prices for homes and borrowed wildly to do it. Now the chickens are coming home to roost!

Greenspan is quoted in today's Yahoo! as recommending simplification of the tax system. He ought to keep his mouth shut and hide his face!

I remember when he intentionally increased interest rates simply because the unemployment rate in America was at 4%, and he wanted it to be at 5%.

Disgusting.

How about the American consumer's love affair with unrestricted credit and a lack of savings discipline. Add to that the rise in health care costs and uncontrolled government spending. I don't believe that Greenspan was the primary cause of our economic problems.

The American public are primarily to blame for their buy now and worry about paying later mentality and for electing an ineffective Congress.

Yes, Aegis, you are right! If Americans had any brains, they would not have elected Bush. They would have voted for Nader instead of WJClinton or any Bush.

You are also right about the irresponsibility of the American consumer. If people could be relied on to be responsible we could tear down the Capitol building and have a nice amusement park facing the Mall.

That's why we have a Fed Chairman and a Comptroller: because people act irresponsilbly, consumers and lenders. I say let's tar and feather Greenspan and his colleague, because if we tried to tar and feather the consumers, we would run out of petroleum and every chicken in Kentucky would be naked!

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At the end of the day, a currency isn't a true commodity, like gold or wheat. It is a store of value. Its supply is determined by a central bank, which has a monopoly on its creation. Foreign-exchange markets are dominated by a cartel of central banks, and currency rates are a function of those central banks' monetary policies.

Trojan Horse wrote that currency is a store of value. What could be meant by "value" if not purchasing power? Does anyone think that our dollars store purchasing power? How many gallons of gasoline will one dollar buy today? I recall when it bought three gallons.

The Fed is mandated by law to protect the purchasing power of the dollar AND, at the same time, to aim for "full employment", whatever that means. In reality, the Fed acts to protect the interests of favored financial institutions: major Wall Street firms, big money-center banks, major real estate interests, and, not the least, the political future of the party or president who appointed the Fed Chairman.

The dollar is not a store of value. At best it is a token of the faith of those who hold dollars in its future purchasing power. When that purchasing power is eroded by inflation, people want to get out of dollars as much as they can. They buy gold; real estate; commodities; foreign currency denominated investments; gems and art treasures.

That faith is misplaced when our government spends what it has not collected in taxes. Ultimately, that puts too many dollars in circulation for the amount of consumable goods that are available. Another major factor in eroding the purchasing power of the dollar is its exchange value against foreign currency. When our dollars go down against the euro, yen and pound, eventually the prices of imported goods rise. Further eroding the exchange value of the dollar is our trade imbalance: we do not sell abroad as much as we buy from abroad.

The dollar has fallen so far that profits in the stock market (before the current crash) have not been adequate to make up for the dollar's decline. In other words, if you have bought good stocks in 2002, after the bottoming of the DJIA, and held them until last week, you would still be losing money in terms of euros or pounds sterling.

The dollar is anything but a store of value - if value means purchasing power.