Alan Greenspan's remarkable 1966 essay on "Gold and Economic Freedom" stands up as one of the more remarkable declarations against the "Statists'" transfer of wealth and economic power through their antagonistic approach towards the Gold Standard. The implications are clear, the Fiat Money regime and fractional reserve banking make little economic sense, are immoral /dishonest and are wholly unconstitutional as the guidelines laid down by our founding fathers suggested 200+ years ago.

Recently, following a House Banking Committee meeting, Chairman Greenspan was asked if his position had wavered towards this testament to confiscation of wealth through the most insidious tax of all, inflation. In response to the addition of "disclaimers" Chairman Greenspan said he still "...would not change a single word."

It is troubling to observe the path Alan Greenspan, Chief Central Banker, has taken since his appointment to Chairman of the Federal Reserve. Some would suggest he has been corrupted by the Political Limelight and therefore ruined. I tend to observe a different tact that aligns in sum with his recognition of immense structural changes within the broad U.S. economy and do happen to believe our Chairman is all too aware of his transgressions. In no way does this absolve the moral obligations gone wanting, but for the purpose of this analysis, I prefer to keep the focus upon the structural challenges the Federal Reserve has had to meet head on.

Just as Chairman Volker had removed the punch bowl as the party had begun to gyrate wildly out of control, Chairman Greenspan's tact was far different... as the party languished on until the wee hours with an empty bar, Alan Greenspan arrived with supply... ten deep in the well.

Wall Street's imbued hangover caught an enormous second wind as the promise of liquidity was brought forth to stand and deliver. And with the promise came Executive Order 12631 signed by Ronald Reagan on March 18, 1988:

Executive Order 12631 - Working Group on Financial Markets - Mar. 18, 1988; 53 FR 9421, 3 CFR, 1988 Comp., p. 559.

"By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:

Section 1. Establishment.(a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of: (1) the Secretary of the Treasury, or his designee; (2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee; (3) the Chairman of the Securities and Exchange Commission, or his designee; and (4) the Chairman of the Commodity Futures Trading Commission, or her designee.

Section 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.

(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.

Section 3. Administration. (a) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions."

The stage had been set for the protection of the Financial Economy's ascension and actions deemed necessary put in order.

As globalization began to take hold in earnest throughout the late 1980's and early 1990's the volume of international financial flows surged as deregulated financial markets allowed greater scope & scale for market forces to act under far less strict capital controls. In the United States trade oriented policies were driven ahead of foreign policy as the cold war had, for all intents and purposes, wound down.

Throughout the late 1990s crisis upon crisis was met with an increasingly heavy hand from the interventionist Central Bankers. And with just cause in their wisdom, as the Global Financial Markets had become intertwined.

The Asian Contagion, Russian & Mexico Currency Debacles, Long Term Capital Management: events that were met with increasingly more of the malfeasance after the fact, effect ignoring cause. The very inadequacies unmasked in the management, regulation and supervision of financial institutions had largely been ignored until the crisis had manifested itself and impaired apres judgements. The solutions consistently presented"moral hazzards"further signaling speculative excess would be subject to remedy. The lessons learned were largely ignored, mitigating crises through sound macroeconomic and financial policy appears immaterial. The reluctance towards restraint serves to precipitate far more aggressive future policy actions.

After the beginnings of the New Economy's Collapse in March of 2000, the need for support became evident to provide the"Productivity Miracle" with a resident footing. It was not until after September 11th that the"interventionist" policies were brought to bare upon the markets. Financial intermediation was needed as fear had taken hold.

Confidence would be continually rattled with corporate scandals thereafter, from Enron to Parmalat.

To Follow - Part 3 The Big Blue: Three Peaks and a"Doomed" House