Former U.S. Federal Reserve Chairman Alan Greenspan has a message for investors: intentional weakening of currencies -- direct and indirect -- has limits.

"The suppression of the reminbi [China's yuan currency ] and the recent weakening of the dollar are, of necessity, producing firming exchange rates in the rest of the world," Greenspan wrote in an op-ed column in The Financial Times.

One of the nation's foremost economic minds is calling on policy makers to let the Bush administration's 2001 tax cuts expire to help balance the federal budget.

"They should follow the law and let them lapse," Former U.S. Federal Reserve Chairman Alan Greenspan told Bloomberg News Thursday, citing the need for tax revenue to cut the U.S. nearly $1.6 billion budget deficit.

President Bill Clinton was last U.S. president to run a budget surplus, recording budget surpluses in the final four years of his administration.

President George W. Bush's 2001 $1.1 trillion tax cut instantaneously turned a budget surplus into a roughly $200 billion budget deficit.

The former head of the world's most powerful central bank once again provided tutelage to Washington-based investigators regarding the source(s) of the financial crisis.

Former U.S. Federal Reserve Chairman Alan Greenspan, testifying Wednesday before the Financial Crisis Inquiry Commission, reiterated that the supply of money globally -- not the Fed's monetary policy on interest rates -- was the primary driver of the extended low interest rate period that contributed to the U.S. housing market bubble, the bursting of which set in motion the financial crisis.

The Wall Street Journal reports (subscription required) on the beaten down market for portraits of former Federal Reserve Chairman Alan Greenspan.

The once revered economic maestro is now seen in many circles as being responsible for multiple bubbles and the current financial crisis: one man who paid $150,400 for a portrait of Greenspan now keeps it under his bed, the way an adolescent might hide a porn magazine. Demand for Greenspan portraits has understandably plummeted, and so have prices.

But is now a good time buy?

One of the world's preeminent economists and former central bankers had some good news and not-so-good news for investors.

Speaking on NBC's Meet The Press on Sunday, Former U.S. Federal Reserve Chairman Alan Greenspan said, "The recession is over. It bottomed back in the middle of the year."

However, Greenspan added that, as many economists agree, the economic recovery will have to continue for some time to absorb the slack in the labor force to lower the U.S. unemployment rate significantly.

That the year 2009 has had more than its share of disappointing economic developments would not be front-page news (or even top-of-the-web-site news).

But the return of the 'wealth effect'? That's almost stop-the-presses stuff: former U.S. Federal Reserve Chairman Alan Greenspan said 2009's bull market in stocks is reducing the need for additional stimulus actions, Bloomberg News reported Thursday.

Aided by U..S. stock market gains, U.S. household net worth increased by $2.7 trillion in Q3 to $53.4 trillion, according to data compiled by the U.S. Federal Reserve.

One of the nation's foremost economic minds is sending an alarm signal regarding the U.S. budget deficit and national debt.

Former U.S. Federal Reserve Chairman Alan Greenspan said he's not "overly concerned" about the recent weakness in the U.S. dollar, Bloomberg News reported Thursday. However, Greenspan is concerned about the long-term costs to the United States associated with its rising national debt.

Will entitlement reform and an increase in existing federal income taxes be enough to close the U.S. budget deficit (pdf)?

If the right conditions line up, perhaps, but former U.S. Federal Reserve Chairman Alan Greenspan suggests that ultimately the pressures on Medicare, Social Security, and Medicaid may be so great that the nation is compelled to add a new revenue source: a value-added tax.

From the "How friggin' stupid can people possibly be??!?!?" file comes this item: The National Association of Realtors hired Alan Greenspan to speak at its Washington D.C. conference on Tuesday.

Greenspan explained that "We are finally beginning to see the seeds of a bottoming" in the housing industry. The New York Post's John Crudele reports:

Alan Greenspan, former Federal Reserve chairman said that the U.S. government may have to nationalize some banks temporarily.

Mr. Greenspan stated: "It may necessary to temporarily nationalize some banks in order to facilitate swift and orderly restructuring." He also said: "I understand that once in a hundred years this is what you do."

Republican senator from South Carolina, Lindsey Graham, said: "We cannot keep pouring good money after bad. [...] If nationalization works, then we should do it."

Congressional investigators repeatedly, verbally pummeled former U.S. Federal Reserve Chairman Alan Greenspan Thursday, for what lawmakers charged was a lack of oversight for a mortgage and housing market run amok - - a lapse they believe encouraged a subprime financing boom and collapse that led to the global financial crisis.

Greenspan, looking subdued but characteristically composed as he testified before the House Committee on Oversight and Government Reform, conceded that a flaw in his free-market ideology contributed to a "once-in-a-century credit tsunami," Bloomberg News reported Thursday.

Greenspan: mortgage risk was miss-priced

The flaw, Greenspan said, was the failure by banks and mortgage lenders to properly price risky mortgage assets, including subprime / Alt-A mortgages, The Washington Post reported Thursday. Further, Greenspan said he saw "no choice" but to force the financial firms that package mortgage loans to "retain a meaningful part of the securities they issue" - - thus mandating that if the loans go bad, they will lose money, as well.

Further, Greenspan said he was "partially" wrong in his opposition in recent years to the regulation of derivatives, Bloomberg News reported Thursday - - in stark contrast to his May 2005 speech opposing derivatives regulation.

Economist David H. Wang told BloggingStocks Thursday that the failure to regulate and review lending practices by banks and mortgage lenders was a bipartisan failure.

"Both political parties are responsible because neither Democrats nor Republicans, not just Republicans, cared about the quality of mortgages banks approved during the housing boom," Wang said. "It was like grade inflation in college where the professor gives 'C' grades to students whose work only deserves a 'D.' No one cared about the quality of the loans as long as they were sold and no longer on their balance sheet. In the future, loan originators must retain partial equity in the loan to make them accountable for mortgage defaults."

Former U.S. Federal Reserve Chairman Alan Greenspan believes financial market turmoil that disrupted the bond market and created liquidity concerns may extend into 2009, Bloomberg News reported Tuesday.

However, Greenspan said the Fed's efforts in March to revive credit have reduced instability. "Things do at this particular stage look a little bit better," Greenspan told Bloomberg News via a conference call, but added that financial doldrums are likely to linger a "good number of months or into next year."

Further, when asked if the U.S. economy was in a recession, Greenspan said, "We are on the brink," Reuters reported Tuesday.

Greenspan's remarks occur one day before the now Ben Bernanke-led Fed announces it interest rate decision, on Wednesday at 2:15 p.m. EDT. The Fed is widely expected to keep interest rates the same, while in its accompanying statement also striking a balance between concern over rising inflation and a pronounced economic stall.

Those familiar with former U.S. Federal Reserve Chairman Alan Greenspan's observations about macroeconomics, in general, and the U.S. economy, in specific, will remember his comments regarding "irrational exuberance" -- imprudent buying of stocks; and "the conundrum" -- the tendency for long-term interest rates to remain low, despite Fed increases in short-term interest rates.

Enter a third: the "pale recession."

Greenspan Monday said the U.S. economy has slipped into an "awfully pale recession" and may continue to experience doldrums for the rest of 2008, Bloomberg News reported Monday.

Further, regarding the economy, Greenspan added that "we are clearly receding" and said it was too soon to declare an end to the credit crisis created by the collapse of the subprime mortgage market and housing sector correction, Bloomberg News reported. Greenspan declined to comment on monetary policy.

Every economic problem or setback seeks a scapegoat -- someone decision makers, pundits, and others can blame (unjustifiably) for a turn of events that's preferred by virtually no one.

The criticism is parsimonious, unfair, and injurious -- but that hasn't seemed to stop practitioners from venturing forth with charges that are often tenuous, if not absurd.

Scapegoat-of-the-moment

The ever-incisive FT columnist Martin Wolf points out that former U.S. Federal Reserve Chairman Alan Greenspan is being cast as 'the villain' for the housing bubble, its bursting, and consequent impact on credit/bond markets and credit availability. All of it is unfair, Wolf notes, and he provides ample evidence to support his point.

Chiefly: Greenspan did not create low, long-term interest rates. The low, long-term rates were caused primarily by a global savings glut, Wolf said. (See: China's savings rate.) The Fed had little control over this -- Greenspan even creatively and accurately referred to the Fed's inability to force long-term rates higher despite the Fed's best effort: he called it "a conundrum." Given the surplus savings sloshing around in global markets at that time, among other factors, those low rates would have occurred regardless of who was Fed chairman.

Former U.S. Federal Reserve Chairman Alan Greenspan predicted that the decline in U.S. home prices will probably end "well before" early next year, as the home inventory supply declines, Bloomberg News reported Tuesday.

Further, Greenspan sees most of the excess inventory eliminated in early 2009, with home prices stabilizing "well before that."

U.S. home inventories total a 9.5- to 10-month supply, at current sales rates, depending on the survey. A normal home sales market typically has a 3-4 month supply.

Revisionist critique

Generally recognized as one of the premiere central bankers in the modern era, Greenspan's legacy and policies have been subject to revisionist criticism, largely as a result of the U.S. housing recession. Critics charge that the Greenspan-led Fed lowered interest rates too much to stimulate the U.S. economy following the September 11, 2001 terrorist attack on the United States. The over-stimulation, critics argue, led to the recent housing bubble. Second, critics say the Fed did not prudently exercise its regulatory power, which led to a collapse in underwriting standards, and the record mortgage defaults that precipitated the credit crunch following the bursting of the housing bubble in 2007.