Greenspan said there was a "high degree of froth in the system," and that it was clear that home equity extraction and the turnover of home sales was waning.

He said it wasn't clear how this will impact the notoriously resilient U.S. consumer.

Similarly, the former Fed chief said it was too soon to say how the latest rise in energy prices will impact consumer spending or feed through to inflation.

He noted that up to now profits for firms outside the financial and energy sectors have not been hurt by higher energy costs.

The ability of U.S. industry to adapt to challenging circumstances and maintain its productivity levels have shielded the economy from these developments in the past, he added.

"And I suspect that is going to continue," Greenspan said.

On Wednesday, data showing an unexpectedly large rise in U.S. consumer prices in April spooked financial markets. The blue chip Dow Jones industrial average suffered its biggest point drop since 2003, while European bourses also plunged on concerns the Fed would need to raise interest rates more to stem inflation.

U.S. Treasury prices also fell, though they rebounded strongly on Thursday in response to signs of slowing employment growth in the U.S. manufacturing sector. Stocks were down again on Thursday.

Overall consumer prices have risen 3.5 percent in the last 12 months, while the core consumer price index, which excludes the effects of volatile food and energy costs, is up 2.3 percent in the year.

The Fed has raised interest rates in 16 consecutive meetings since June 2004, but traders and analysts have had mixed views over whether the Fed would tighten again in June, raising its benchmark rate to 5.25 percent, or pause.

Greenspan departed from the Fed on January 31. He was the second-longest serving chairman in the Fed's 92-year history, having served more than 18 years.

Greenspan was succeeded by Ben Bernanke.

It also was Rumsfeld's first opportunity to comment on Bush's announcement Monday that he is sending 6,000 National Guard troops to the U.S. southern border to support the federal Border Patrol. The administration has not said how much it expects that to cost, nor has it set a hard time limit on the assistance.

Although the Guard troops will be operating under state governors' control, the cost will be paid by the federal government.

Pentagon press secretary Eric Ruff said Tuesday that Rumsfeld planned to tell the appropriations panel that Iraq has entered a "hopeful new phase'' following a successful election last December and progress in recent weeks toward assembling a unity government.

"We will be talking about defense spending in terms of how we view the global war on terror and why there is reason for optimism in Iraq,'' Ruff said.

Rumsfeld has stressed several times in recent weeks the importance of getting congressional approval for the extra $65 billion in war costs. About half of that is for the cost of conducting the fighting in Afghanistan and Iraq; about $5.9 billion is for developing Iraqi and Afghan security forces, and $1.9 billion is for countering the threat posed by roadside bombs, which are a leading killer of U.S. troops.

The government has so far provided about $368 billion for wars in Iraq and Afghanistan and global operations against terrorism, according to the Congressional Research Service, Congress' nonpartisan research arm. That includes military, foreign aid, reconstruction and veterans spending.

That does not include the $65 billion the administration has requested for the rest of this year, or the $50 billion it has proposed for the beginning of next year.

Of the money approved so far, the research service estimates that $261 billion was for Iraq and $77 billion for Afghanistan and worldwide operations against terrorism, with most of the rest for improving security at U.S. military bases.

The US cannot finance $800 billion trade deficits with China and Japan's savings for ever; one day it will have to stop. The dollar will collapse - or the Americans will slap on tariffs - and the open world system we have known since the war will begin to implode. One day, as I said earlier, it will be real; but it's probably not now.

What we want - rather as Gordon Brown wishes on Tony Blair - is an orderly transition to a lower dollar, lower American trade deficits and higher spending in China. The trouble is that these days nothing happens in an orderly way; there is so much speculation that once the speculators smell an one way bet, it becomes a self fulfilling prophesy. Hedge funds and the tidal wave of speculative capital should be better regulated, but until disaster strikes there will be no appetite to do anything.

And China spending more is like waiting for Godot; it never arrives - not least because it would set in train threats to the Communist party's position. So regard the last few days as an omen - an augury of which nobody took any notice . Globalisation needs to be governed, but that is not on the agenda. So we wait, watch and hope for the best while preparing for the worst.

Asked for her comments, Kathryn Mulvey of Corporate Accountability International told IPS that human rights abuses by extractive industries are among "the most concentrated, visible and urgent to address".

"Abuses by other industries such as tobacco, which claims five million lives around the world each year, have not typically been framed as human rights issues, but that is changing," she said.

The interim U.N. study, by a team headed by John Ruggie, a special representative of Secretary-General Kofi Annan, was conducted in response to a resolution by the now-defunct U.N. Commission on Human Rights.

"The problems of corruption and the misallocation of public revenues have been endemic," the report points out. "They undermine the rule of law, impede the pursuit of social objectives, and contribute to conflicts that frequently foster human rights abuse.."

"There being no global repository of comprehensive, consistent and impartial information, we cannot say with certainty whether abuses in relation to the corporate sector are increasing or decreasing over time, only that they are reported more extensively because more actors track them and transparency is greater than in the past," the report points out.

According to the Geneva-based U.N. Conference on Trade and Development (UNCTAD), there are some 70,000 transnational firms worldwide, together with roughly 700,000 subsidiaries, and millions of suppliers spanning every corner of the globe.

Last week, Ruggie met with several non-governmental organisations (NGOs), including human rights groups, mostly based in New York, primarily to brief them on the progress made in relation to protection of human rights vis-a-vis transnational corporations. "The general mood was that his interim report leaned way too much in accommodating business priorities," a spokesman for one of the participating groups told IPS.

He said that Ruggie is planning several regional consultations, including one in Colombia and another in Thailand in late June. "He wants to do site visits to companies, as well as affected communities."

Mulvey said that in most industries -- from water to tobacco -- "transnational corporations engage in irresponsible and dangerous actions". "When campaigns have been organized to protect people and save lives, we have won gains on an issue-by-issue basis," she added.

To reverse the tobacco epidemic, health and human rights advocates have a great tool in the first global corporate accountability treaty, formally known as the Framework Convention on Tobacco Control.

"But in a world where more than one billion people don't have safe water to drink, we must strengthen and enforce international legal instruments to prevent corporate interference in the human right to water," she added.

"Transnational corporations are responding to the demand that they be accountable to people and communities, but in the long run, democratic global institutions and enforcement mechanisms are necessary to stop abuses," Mulvey added.

According to the report, the United Nations is the process of surveying the "Fortune 500" companies -- 500 of the world's biggest corporations -- in relation to the protection of human rights. But only about 80 companies have responded so far.

Asked why, Mulvey said: "This demonstrates why we need global human rights norms that are binding on corporations, with teeth." She said that reporting must be mandatory, as standard as financial reporting, with a rigorous auditing regime.

"The adoption of the Human Rights Norms for Transnational Corporations by the Sub-Commission on the Protection and Promotion of Human Rights was a step in that direction", and Ruggie should build on that progress, she added.

Speaking generally of corporate responsibilities, Saradha Iyer of the Malaysia-based Third World Network told IPS: "I personally do not think corporations have played their role in sustainable development."

In fact, she said, they have pushed for sustained economic growth with little or no regard for the Rio principles -- laid down at the 1992 Earth Summit in Brazil -- that the "polluter pays", or the precautionary approach when it comes to the environment. "They get away with impunity because they have already paid to rig legislation in their favor and therefore appear to have complied," she added. That is the reason, she said, the Papuans and others are protesting in the streets and blockading access to mines.

"Given the recent spate of violations by oil and mining companies, they are going to up the ante on further green-washing," she added.

The United Nations has also been promoting the virtues of its own "Global Compact", described as "the world's largest corporate responsibility initiative", with nearly 3,000 corporate participants and other stakeholders.

But Iyer of the Third World Network said: "The Global Compact has become adept at surveys and publications that tout its members contributions."

While a few corporations are taking a longer term perspective on the issue, she said, the majority pay lip service to the triple bottom line -- and that only because ratings agencies and shareholders are behind the pressure for change.

The U.N. study also said there are at least three "distinct drivers" behind the increased attention on transnational corporations.

The first is simply the expression of one of the oldest axioms of political life: the successful accumulation of power by one type of social actor will induce efforts by others with different interests or aims to organize countervailing power.

"When large firms in industrialized countries first became major players on the national scene in the late 19th century, countervailing efforts came from labor and faith-based communities, among others, and ultimately from the state," the study said.

At the global level, a broad array of civil society actors has been in the lead. Moreover, when global firms are widely perceived as abusing their power -- as was the case with major pharmaceutical companies concerning pricing and patents of AIDS treatment drugs in Africa -- a social backlash was inevitable, the study noted.

The second driver, according to the study, is that some companies have made themselves, and even their entire industries, targets by committing serious harm to human rights, labour standards, environmental protection and other social concerns.

A third rationale for engaging the transnational corporate sector is the sheer fact that it has global reach and capacity, and that it is capable of acting at a pace and scale that neither governments nor international agencies can match.