Market crisis 'will happen again'

"The crisis will happen again but it will be different," he told BBC Two's The Love of Money series.

He added that he had predicted the crash would come as a reaction to a long period of prosperity.

But while it may take time and be a difficult process, the global economy would eventually "get through it", Mr Greenspan added.

"They [financial crises] are all different, but they have one fundamental source," he said.

"That is the unquenchable capability of human beings when confronted with long periods of prosperity to presume that it will continue."

(...)

Mr Greenspan, who when he ran the US central bank was hailed as a man who could move markets, also warned that the world's financial institutions should have seen the looming crisis.

"The bankers knew that they were involved in an under-pricing of risk and that at some point a correction would be made," he said.

(...)

In order to prevent the situation arising again financiers and governments should look to clamp down on fraud and increase capital requirements for banks, the former central banker said.

(...)

"The most recent endeavour to re-regulate is a reaction to the crisis. The extraordinary impact of these global markets is making a lot of financial people feeling they have lost control.

"The problem is you cannot have free global trade with highly restrictive, regulated domestic markets."

So:

• The crisis was predictable (and, now he tells us, predicted by him!) and could have been avoided;
• but it was unavoidable, because it's caused by the fundamentals of human nature;
• bankers knew (like him) that they were behaving foolishly and they should now be regulated
• but despite this, regulation is bad, because it prevents the nice booms we so love;
• busts don't count when evaluating deregulation, only the boom part.

Why is this man taken seriously, again, and not as the religious nutcase he is?

In the long run, we're all dead. John Maynard Keynes