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.
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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 age, which naturally led him to become a true believer in precious metals and all that they stand for.
Nathan served eight years in the Royal Canadian Navy as an electronics technician, seeing the true state of the world, before starting his first successful business. He has since gone on to create a number of businesses, all of which are still in operation and growing.
In addition to this, Nathan runs a network of successful precious metals blogs, and a growing newsletter that has attracted readers from all around the world.
He is a regular and highlighted writer for the highly respected Sprott Money Blog, which covers world events, geopolitics and of course precious metals.
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The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
