Final Word from Tuesday, September 18, 2007
Communism is dead and buried, but it keeps rearing its ugly head. In his new memoirs, Alan Greenspan blames it partly for the global credit crisis. The fall of the Berlin Wall unleashed a billion workers from Eastern Europe and Asia onto global markets, he said, putting downward pressure on wages and prices, and thus on long-term interest rates. This led to a housing boom in at least 40 different countries, including the CR. Low long-term rates, he added, provided the initial gain in housing prices that engendered the speculation that developed into a global credit crunch. Czechs like to think they stand apart from the very problems they unwittingly helped thrust on the West. And for now, they do, but it seems this can only persevere if they prove Greenspan wrong in postulating that financial bubbles are inevitable, because human beings are incapable of learning from what came before.[Czech Republic The Age of Turbulence: Adventures in a New World real-estate consumer lending]