The City of London is in mourning this morning. Alan Greenspan, the man who presided over the American economy for nearly two decades and shaped the financial architecture of the modern world, has died at the age of 100. The cause of death has not been released, but the news has sent ripples through financial markets, where Greenspan's legacy remains a touchstone for monetary policy.
Greenspan served as Chairman of the Federal Reserve from 1987 to 2006, a tenure that spanned the end of the Cold War, the dot-com bubble, and the aftermath of 9/11. His philosophy of deregulation and trust in markets to self-correct became gospel for central bankers globally. Under his watch, inflation was tamed, and the Great Moderation was declared. But history may judge him more harshly for the seeds of the 2008 financial crisis, sown during his time in office.
To understand Greenspan is to understand a shift from gold-standard thinking to a world of fiat money and financial engineering. He was a disciple of Ayn Rand and believed in the moral virtue of capitalism. This was not just economics, it was a creed. And it spread from Washington to London to Tokyo.
Now, with Greenspan gone, a chapter closes. The era of unquestioning faith in market efficiency has passed, replaced by a more cautious, interventionist approach. Yet his fingerprints remain on every central bank balance sheet. The quantitative easing of the past decade, the current debates on inflation, all trace back to the intellectual framework he built.
In the City, traders will pause today. They will remember the Maestro, the man who could move markets with a single word. But they will also acknowledge that the financial system he helped create is now facing unprecedented stress from climate change, geopolitical fragmentation, and technological disruption. The biosphere does not care about interest rates.
For those of us covering the intersection of economics and the physical world, Greenspan's death is a reminder that the rules we built our prosperity on were never permanent. The carbon cycle operates on timescales far longer than business cycles. And Greenspan's generation largely ignored it. Now, his successors must grapple with the consequences.
We will have more analysis throughout the day. For now, the markets are open, the algorithms are trading, and the world moves on. But Alan Greenspan, for better or worse, is gone.