Where was this guy when he head of the Federal Reserve?
Former Fed Chair Alan Greenspan spoke with Bloomberg News late last month to discuss the global financial markets and the Brexit fallout.
In the interview at Bloomberg Surveillance – A Breakfast Conversation, he stunned many viewers and the audience by somewhat advocating a return to the gold standard. It’s stunning because he was once a gold bug but then hated gold when he was heading the United States central bank.
According to Greenspan, we are in the early days of a major financial crisis. He warns that the next biggest unexpected move to happen in the markets is inflation, which is definitely going to happen with the global printing presses on at full speed. He notes that there isn’t any inflation now, but it’s likely to happen soon.
Greenspan further added that if the U.S. returned to a gold standard then everything would “be fine.”
“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine,” Greenspan said. “Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?”
Is the fact that Greenspan is 90 years old have anything to do with his recent praise of gold?
Prior to entering the Fed, Greenspan was a major proponent of the yellow metal. Here is what he wrote in 1966, which was published in The Objectivist:
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
“This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
He has also iterated in the past couple of years that gold as well as silver is money and a great investment for individuals and central banks.
“It’s currency, of course. Gold, and to a lesser extent silver, are the only major currencies that don’t require a third party credit guarantee. Gold is inbred in human nature. Gold is special. For more than two millennia, gold has had virtually unquestioned acceptance as payment to discharge an obligation. Remember, Germany could not import any goods in the last part of World War II unless it paid in gold.”
Sounds pretty good, huh? Well, everyone remembers what Greenspan did during his tenure at the Fed and what he thought of gold then. Question: what the heck happened then and what the heck is happening now? It’s interesting what happens to you when you get old. You just don’t care anymore.
This is so stupid. Does Mr. Greenspan have plenty of gold, that he wants to go up 5 times in value. The 19 Trillion in government debt equals over 12 billion in ounces of gold at $1,500. Estimates are that there are about 6 billion ounces in the world. Does anyone see a problem. Even if we could go back on the gold standard it would not change anything. If you purchased your gold at low points in the price and sold at high points in price you would do ok, but if you purchased at high point in the price and had to sell at low points in the price you would lose money just like anything else.
You’re not too bright with money, are you?
If you would of bought gold any time after 1972 and had to sell it in 2001 because you needed the money, you would of lost money. The gold market is controlled by the governments and banks, Do you really think they are going to change anything if we go back on the gold standard. Every time we have had a recession gold has tanked right along with everything else. You must of be one of those people who bought gold at $1,800 per ounce in 2011. Gold the investment that keeps on giving headaches.