• 5 hours New Allegations Against Huawei Raise Tensions In Tech Cold War
  • 8 hours Chinese Investments In the U.S. Plunge 90% Under Trump
  • 11 hours Mining Major Sets Aside $400 Million To Reduce Emissions
  • 13 hours Golden Ice Cream And Spiced Vodka: The Craziest Things Made From Gold
  • 1 day Can Twitter Sway Economic Policy?
  • 1 day Widespread Power Outages Hit New York City
  • 1 day Equifax To Pay $700 Million To Settle Data Breach Case
  • 2 days Netflix Struggles To Rebound After Subscriber Hit
  • 2 days $15,000 For Your Crypto’s Ticket To Visibility
  • 3 days The Next Fashion Frontier
  • 4 days What Is Africa’s Role In The New Silk Road?
  • 5 days Trump Was Right About The Dollar
  • 5 days Is Silver Gearing Up For A Rally?
  • 5 days World’s Largest Hedge Fund Turns Bullish On Gold
  • 6 days It’s Time To Spend More On Clean Energy R&D
  • 6 days Contrarian Investors Are Beating The Stock Market
  • 6 days Bulgaria’s Revenue Agency Falls Victim To Biggest Cyber Heist In History
  • 6 days Amazon Faces European Union Anti-Trust Probe
  • 7 days Commodities Are Having A Stellar Year
  • 7 days Bezos’ Next Big Project Could Be Worth $100 Billion Per Year
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Nathan McDonald

Nathan McDonald

Nathan McDonald is a libertarian, entrepreneur and precious metals enthusiast. He has always taken a keen interest in free markets and economics since an early…

Contact Author

  1. Home
  2. Markets
  3. Other

Alan Greenspan is Now a Gold Bug? Say What?

Alan Greenspan
Originally posted at SprottMoney February 21, 2017

Is 2017 even real? What kind of weird, fantastical twilight zone have we entered into? The world has been turned upside down and I will continue to point out the bizarre and unusual things that continue to be said and acted upon as we go forward. If past results are any future indication, then things are going to get a whole lot weirder.

Alan Greenspan, the "Maestro" of fiat money and one of the most prolific fiat money printers that the world has ever seen has entered into this bizarre alternative reality and is yes, now once again a gold bug!

To those of you who know your history, you will remember the following, wrote by Alan Greenspan in 1966:

"Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit."

This common sense statement, which was just a part of Alan Greenspan's larger work titled "Gold and Economic Freedom", would be brought up over and over again during his tenure as the head of the Federal Reserve.

It would be pointed to time and time again, to showcase just how far he had gotten away from common sense and to highlight that once upon a time, Alan Greenspan didn't just believe in money printing to infinity, he actually once believed in reality-based economics!

It appears, that either he has once again found "religion", or he was just full of it during his time at the FED and was only pandering to Wall Street, attempting to appease them. He did this likely for his own profit, as he is once again returning to his past beliefs.

In a recent statement he had to following to say:

"Investment in gold now is insurance. It’s not for short-term gain, but for long-term protection. Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today, we would not have reached the situation in which we now find ourselves."

This comes on the heels of a previous statement he made in 2014, which was dismissed by many at the time, but now proves that he truly does believe in this ideology given his recent doubling down:

"Intrinsic currencies like gold and silver are acceptable without a third party guarantee. Gold serves a very important place in monetary reserves...

Why did Central Banks put money into an asset which has no rate of return, but cost of storage and insurance and everything else like that - why are they doing that? If you look at the data, with very few exceptions, all of the developed countries have gold reserves. Why?"

So there you have it. Alan Greenspan, one of the biggest money printers of all time, has grown a conscience. Sadly for him, it's a little too late for redemption. Perhaps he doesn't want to go down as one of the most sadistic money printers of all time.

Perhaps he would now like to correct the error of his ways and return back to the sound common sense principles his young self once believed in. For that, we praise him, but this will never erase the reckless actions of his past, of which the true damage is yet to come. The greatest collapse of our modern times is on its way.

 

Back to homepage

Leave a comment

Leave a comment