The Reinvention Of Alan Greenspan

Former chairman calls Fed balance sheet a tinder box, endorses private gold ownership.
During the time Alan Greenspan and representative Ron Paul had their famous series of exchanges (some might have labeled them confrontations) during Congressional hearings from 1997 to 2005, the congressman made what turns out to have been a prescient observation. “My questions,” he said, “are always on the same subject. If I don’t bring up the issue of hard money versus fiat money, Greenspan himself does.” I say “prescient observation” because here we are a decade or more later and the “new” post-Fed Greenspan sounds very much like the “old” pre-Fed Greenspan- – – the one who consistently advocated gold before he became Fed chairman.
Greenspan has always come across as a conflicted figure forced to reconcile his responsibilities as chairman of the Federal Reserve – – the epicenter of the fiat money universe – – with a “nostalgia,” as he put it, for the gold standard, its diametric opposite. As such, I always saw him as torn between the two – – the devil on one shoulder and an angel on the other.
Outside those memorable proddings by Congressman Paul, Greenspan rarely spoke publicly about the virtues of gold while Fed chairman, and when he did his approach seemed guarded. Even in the years following his tenure, he rarely broached the subject. In recent months though, as you are to read, the gloves have come-off not just with respect to gold but with the dangers inherent to the fiat monetary system as well.
The reinvention of Alan Greenspan Part one – an article in Foreign Affairs magazine
Greenspan’s reinvention began with a surprising defense of gold in the October issue of Foreign Affairs magazine. In that article, titled “Golden Rule: Why Bejing Is Buying,” he reminds top level policy makers of gold’s role as a national asset of last resort. “If, in the words of the British economist John Maynard Keynes,” he says, “gold were a ‘barbarous relic,’ central banks around the world would not have so much of an asset whose rate of return, including storage costs, is negative. . . Gold has special properties that no other currency, with the possible exception of silver, can claim.”

This post was published at Gold-Eagle on November 1, 2014.