Scary Comments From Ex-Fed Chairman Volker

Paul Volker saved this country in the early 80s from spiraling inflation.


[1. Ex-Fed Chief Volcker: Most Dangerous Economy Ever

In a recent speech, former Federal Reserve Chairman Paul Volcker voiced his concerns for the future the American economy and that of the rest of the world.

Among other things, Volcker warns of a possibly dramatic shift in the relationship between U.S. consumerism and foreign investment – and the dire consequences that would have on Americans.

Some focal points of his speech:

* In regard to the U.S. economy, Volcker sees "disturbing trends: huge imbalances, disequilibria, risks..."
* He says these are the most dangerous economic conditions he has ever seen – and, he notes, he has seen "quite a lot."
* Though businesses are rebuilding their financial reserves, in only a few years, the federal deficit has offset all that savings.
* Home ownership has become a vehicle for borrowing rather than a means of financial security.
* In the U.S., we consume and invest about 6% more than we produce.
* The U.S. economy is held together by a foreign capital influx of over $2 billion each day.
* Foreign competition has kept interest rates relatively low despite vanishing savings and rapid growth.]