More important, they believe his bungling is now causing serious tremors in the global economy. The biggest tremor is the alarming decline in oil prices. No commodity is so involved with every aspect of the global economy as oil. Stable oil prices are a major assurance of the global market's health. But when those prices soar or plunge big trouble soon follows.
Unchecked deflation can lead to severe recession or even depression.
What likely prompted Greenspan's speech was a decision by OPEC to lift its ceiling on oil output. And most ominous was key U.S. oil ally Saudi Arabia's support of that move. Early this month, according to the Nihon Keizai Shimbun, Japan's Wall Street Journal, the Saudi National Oil Corporation sent a FAX to all major Japanese companies informing them of even cheaper oil to come. For over half a century America has relied on the Saudi monarchy to keep world oil prices stable. That link broke down during the October 1973 Arab-Israeli war when the Saudis caused oil prices to rise by 400 percent.