Thursday, February 23, 2017

Alan Greenspan on gold: Does he have a crisis of conscience or Alzheimers?

From the biggest money printer of all time as related to the World Gold Council in their winter edition of "Gold Investor".

"Significant increases in inflation will ultimately increase the price of gold,” Greenspan said. “Investment in gold now is insurance. It’s not for short-term gain, but for long-term protection.”

"I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counterparty signature. Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counterparty. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC."

Interesting that he never talked like this when he was FED chairman and help create the stockmarket bubble in 1999/2000. I guess in his old age he has gotten religion.

It is interesting how people will change their views based on being given power and money. Alan Greenspan in his younger days was an acolyte of author Ayn Rand who is the founder of Objectivism. Here is a quote about his time with Rand:

But she had gone far beyond that, thinking more broadly than I had ever dared. She was a devoted Aristotelian -- the central idea being that there exists an objective reality that is separate from consciousness and capable of being known. Thus she called her philosophy objectivism. And she applied key tenets of Aristotelian ethics -- namely, that individuals have innate nobility and that the highest duty of every individual is to flourish by realizing that potential. Exploring ideas with her was a remarkable course in logic and epistemology. I was able to keep up with her most of the time.

Rand's Collective became my first social circle outside the university and the economics profession. I engaged in the all-night debates and wrote spirited commentary for her newsletter with the fervor of a young acolyte drawn to a whole new set of ideas. Like any new convert, I tended to frame the concepts in their starkest, simplest terms. Most everyone sees the simple outline of an idea before complexity and qualification set in. If we didn't, there would be nothing to qualify, nothing to learn. It was only as contradictions inherent in my new notions began to emerge that the fervor receded.

Back in those days he was a free market thinker and a believer in gold as money. Once he got sucked into the establishment and began working for investment banks and for Richard Nixon I guess he succumbed to the offer of power and prestige and put his beliefs on the shelf and shilled for fiat money and the establishment as Chairman of the Federal Reserve.

I guess in his old age he has nothing to lose so he now feels compelled to come clean.

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