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The Retirement of a Maestro

Allan Greenspan, the Chairman of the Federal Reserve, is set to retire in January. According to an article in The Economist, the last time there was a change in hands of the Chairman of the Federal Reserve, there was economic instability for at least a year, starting when the Fed chairman was replaced…

Financial markets are typically more volatile during the first year after the handover to a new chairman than during the rest of his tenure.

Since the dollar is already in a weakened position, and there’s a housing bubble, this may be the thing that causes the bubble to burst….as the article indicates:

There is a stronger case for restraining housing bubbles than stockmarket bubbles, because they tend to cause greater economic harm when they burst.

…which stands to reason, as more people have their money invested in the housing market, than in the stock market.

What will this mean for the future? Well, with the right positioning, this could mean major gains, especially when it comes to currency trading. I, for one, am hoping to make money off of this, as I am sure the hand-off will produce a negative effect for the U.S. Dollar. Wouldn’t be too bad of a Christmas bonus to gain 10 cents on the pound…. :o)

This entry was posted on Wednesday, October 19th, 2005 at 7:03 am and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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