Greenspan sees threat of '70s-style inflation

WASHINGTON —An important point in Alan Greenspan's much-hyped memoir has gone largely unnoticed: He acknowledgesthat global economic forces, more than Federal Reserve policy, kept inflation low and manageable for two decades.
By global forces he means free trade, the rise of emerging, cheap-labor economies led by China and India and the benefits from information technology and the Internet.
He warns that these forces — "globalization," in shorthand — are weakening as they mature. He fears that could mean a gradual return to persistent 1970s-style inflation over the next 20 years or so. And he worries that could cripple a U.S. economy that's already facing strains from the graying of the population over the same period.
Not everyone agrees.

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