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.
This post was published at GoldSeek on 22 February 2017.