Chapter 3. Talk Isn’t Cheap


“Silence is golden.”


Irrational Exuberance

On Thursday, December 5, 1996, Federal Reserve Chairman Alan Greenspan accepted the Francis Boyer Award from the American Enterprise Institute and gave an after-dinner speech. The speech, “The Challenge of Central Banking in a Democratic Society,” focused largely on the history of monetary policy in the United States and the evolution of central banking. However, as both the guest of honor and the dinner participants knew, anything that the Fed chairman said would be closely scrutinized by market participants for hints on potential Fed monetary policy actions as well as his views on financial markets. Listeners found what they were looking for when Chairman Greenspan ...

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