Greenspan: 'Iraq war all about the oil'

The White House has been rocked by the former US Federal Reserve chairman's claim that the war in Iraq is mostly about oil.

America's elder statesman of finance Alan Greenspan has shaken Washington with his long-awaited memoirs, The Age of Turbulence: Adventures in a New World - published by Penguin on Monday.

Mr Greenspan, who headed up the Fed for 18 years before retiring in 2006, says: "I am saddened that it is politically inconvenient to acknowledge what everyone knows. The Iraq war is largely about oil."

The 81-year-old is understood to believe that Saddam Hussein posed a threat to the security of oil supplies in the Middle East.

Mr Bush has always claimed that the March 2003 invasion was over fears about Saddam Hussein's weapons of mass destruction - which were never found - and his support for terrorism.

In the book, Mr Greenspan also slams the US president and congressional Republicans for abandoning fiscal discipline and for putting politics ahead of sound economics.

He says: "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences.

"Much to my disappointment, economic policy-making in the Bush administration remained firmly in the hands of White House staff."

Mr Greenspan's long association with Republican administrations and his reputation for independence add clout to his criticism.

He was the second longest-serving chairman in the Fed's 93-year history when he stepped down in January 2006 and is hailed for overseeing the longest US economic expansion on record.

© Independent Television News Limited 2007. All rights reserved.