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Alan Greenspan: QE Failed To Help The Economy, The Unwind Will Be Painful, "Buy Gold"
It appears it is time for some Hillary-Clinton-esque backtracking and Liesman-esque translation of just what the former Federal Reserve Chief really meant. As The Wall Street Journal reports, the Fed chief from 1987 to 2006 says the Fed's bond-buying program fell short of its goals, and had a lot more to add.
Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases.
He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage-backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy.
“Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” said Mr. Greenspan. Boosting asset prices, however, has been “a terrific success.”
...
He observed that history shows central banks can only prick bubbles at great economic cost. “It’s only by bringing the economy down can you burst the bubble,” and that was a step he wasn't willing to take while helming the Fed, he said.
...
The question of when officials should begin raising interest rates is “one of those questions I cannot answer,” Mr. Greenspan said.
He also said, “I don’t think it’s possible” for the Fed to end its easy-money policies in a trouble-free manner....
"Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets, so there is no reason to suspect that the actual process of boosting rates would be any different, Mr. Greenspan said.
...
“I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves,” Mr. Greenspan he said.
And finally - while CNBC's audience is told what a terrible thing gold is, "The Maestro", having personally created the financial cataclysm the world finds itself in following a lifetime of belief in fiat, Keynesian ideology and "fixing" one bubble with an even greater and more destructive asset bubble, has suddenly had an epiphany and now has a very different message from the one he preached during his decades as the head of the Fed.
Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.
What Greenspan failed to add is that it is thanks to his disastrous policies (subsequently adopted by Bernanke and Yellen) that gold is the "place to put money."
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Or Beanie Babies.
Or buggy whips?
Or rubber baby bubble busters?
someone horsewhip this anus ! Greenspan is a vile soulsucking fed zombie
give the captain of the titanic, 3 cheers.... hipp hipp hooooray you azzhole
Hilarious though..complete 180 of what he was chirping about when running things....if a broker or financial advisor acted the same way...people would be screaming bloody murder and talks of negligence and breeches of "fiduciary responsibilities"
Not these guys....
The Fed is buying a lot of everything in this market to keep it up...on our dime (since we are on the hook either way)...
Does the Fed have a fiduciary responsibility?
Wow I would love to be able to be responsible for and handle, direct, billions, trillions of dollars without zero accountability to anyone!
Hey Alan, thanks in advance for leaving your gold fillings on the floor by the door in front of the showers.
I think now that the Fed has been shown to be a bunch of morons, led by Top Morons, it's time to wind up the Fed.
You can't take your gold with you Greenspan. So you better get as much of it that you can. Put it all around you. Build a room with a golden thrown and an alter with a golden calf, a golden harp and servants at every door that wear golden sandels and golden turbans. In a few short years you will be coughing and gasping thinking why you wasted your life M'Fer.
Who'd a thought, inflation without wage growth would crush demand...
Queue United States Ebola crisis #3.
Old Alan did still have a crush on gold when he was running things at the fed. He probably just got worn out and sold out:
While chairman:
In response to a question during congressional testimony on whether the U.S. should sell some of its 8,138 tonnes of gold, Alan Greenspan responded:
"This was debated in the U.S. in 1976. The conclusion was we should hold our gold. Gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody, gold is always accepted.”
- Alan Greenspan, Testimony before the U.S House Banking Committee, May 20, 1999. http://www.secinfo.com/dMxdz.617.htm
"Arguably, immediately following the dollar's float in 1973, U.S. authorities did not intervene and left it to others to adjust their currencies to ours. We did not sense a need to hold what we perceived to be weaker currencies in reserve because presumably we could always purchase them in the market, when, and if, the need arose. We held significant reserves in only that medium we judged a harder currency, that is gold”
-Alan Greenspan, April 29, 1999 – World Bank Conference on Reserves Management
http://www.federalreserve.gov/boarddocs/speeches/1999/19990429.htm
Question: "... is it your intention that the report of this hearing should be that Greenspan recommends a return to the gold standard?"
- Senator Paul Sarbanes
Answer: "I've been recommending that for years, there's nothing new about that. It would probably mean there is only one vote in the FOMC [Federal Reserve - Federal Open Market Committee] for that, but it is mine."
-Alan Greenspan, Senate Committee Hearing, September 1997
4 years after he was fed chair:
Gold prices that jumped above $1,000 an ounce this week are signaling that investors are buying metals to hedge against declines in currencies, former Federal Reserve Chairman Alan Greenspan said.
The gains are “strictly a monetary phenomenon,” Greenspan said today at an investment conference in New York. Rising prices of precious metals and other commodities are “an indication of a very early stage of an endeavor to move away from paper currencies,” he said. “What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment” -Alan Greenspan in a Bloomberg Article September 9th 2009 - http://www.bloomberg.com/apps/news?pid=20601083&sid=acrGvxBXPDfk
I live in eastern europe. Pawnbrokers, jewelry shops, and others have sign up on the street "buying gold (equivalent of) $25-30 per gram", and old ladies are STILL in line.
How much is gold worth? Really?!?!
I figure, mabe 5 or 6X as much.
I think he is trying to clear his conscience. What a load of BS, of course from the Maestro (aka, the Reaper).
What a two-faced SOB. May history log him in as a destroyer of worlds.
Greenspan speech today (exclusion?)
Omission ??? @ 22:42 http://www.youtube.com/watch?v=XqHNF6NOpoE
Would love to have heard !!!
Regardless of what you call it the "Federal Reserve Nightmare" or the "Yellen conundrum", the box Ben Bernanke made when he painted both himself and the Federal Reserve in a corner remains. Bernanke has by passing the chairmanship to Yellen escaped from the QE trap but left the rest of us fully in its grasp.
With a policy of loose and cheap money and an inflation target of just 2% the Federal Reserve continues to please those gambling that not fighting the Fed guarantees profits. I wish someone would let the Fed know we have already passed their inflation target.
As many Americans are forced to pay higher food, gasoline, and health insurance premiums any thought that inflation is not higher has come from the false illusion brought from lower payments on things like auto loans and mortgages. This is a one off and will not continue. Trouble lurks ahead. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/06/exit-strategy-from-qe-remains-elusive.html
The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.
Everyone paying attention knows that the size of the derivatives market is about 20 times larger than the global economy. About 95% of the $230 trillion in US derivative exposure is held by four US financial institutions, the article below looks into how this could collapse the economic system.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html
Yup, Silver and Gold. My favorite song from "Rudolph the Rednosed Reindeer!"
Is it wrong to dream of seeing an angry gorilla tear off Andrea Mitchell's arm and then use it to beat Greenspan to a pulp....Is that so wrong??
In my dream it beats him with obola's head
Clint is looking for his gold. Right now all he has is an empty chair to talk to.
http://www.youtube.com/watch?v=933hKyKNPFQ
I will wager we will see at the end of Q1, to mid Q2 an uncontrollable economic tail spin.
My guess is that it will start with significantly worse than "expected" retail numbers from Christmas sales (down double digits year previous) it will then accelerate and have a cascading effect, markets will contract.
I aso think that there will be multiple "events" which are planned to happen or are allowed to happen (massive Ebola epidemic, war, significant terror attack inside the US, etc. in order to blame the economic implosion on and to bring order out of chaos.
Don't believe the the lies, or that those running the Government are imbeciles, its an act.
Sun tzu in the art of war said:
-- “Appear weak when you are strong, and strong when you are weak.”
-- "Even though you are competent, appear to be incompetent."
I don't know about the Christmas season ... the sheep still have unused credit card balances and we've seen deleveraging in the last few years. Coupled with a 94 consumer confidence number, what people make and how much they have may take back seat to what they think they will make and how much they can borrow.
If the market doesn't go down from here ... watch out.
There is now absolutely no reason for this market to go up ... unless the FED has instructed banks to buy, buy, buy
Argentina and Zimbabwe's markets both went through the roof as they entered high inflation/hyper inflationary stages too... Jus sayin'...
Alan lies, Alan waives goodbuy. Buy gold to realize. That QE is making the dollar stroger now that it's over. Ayn Rand was ahead of her time.
Bond Bying? oh the`re still able to call it that?
sorry! my mistake! carry on!
Oh Alan, we hardly knew you!
This is how ridiculous things have gotten. Asset prices? - $10K for a piece of cardboard. I have the unlimited one worth ~$4K(near mint condition). My cost $20... These damn things are so rare that if you pull one out in any card/hobby shop, a hush of reverence falls over the room. The last place I took it into to sell, couldn't even put a price on it, and didn't have enough cash to take it off my hands.
http://sales.starcitygames.com/cardsearch.php?singlesearch=black+lotus
Been waiting to dump it and buy some gold. Looks like now's the time.
Those prices have been about the same for years now. There's a huge risk of counterfeiting - remember, these are paper.
They're also paper that (almost) nobody plays with anymore. I had one once - sold it long ago.
I would sell asap. MTG is a luxury like vacation cottages. The prices crash during recessions.
The ruble fell to a record low against the dollar and euro in early trading Wednesday despite a $2.5 billion intervention from the Russian central bank to prop up the currency.
The Russian central bank has been forced to intervene once more in currency markets by using foreign exchange reserves to purchase rubles as the currency continued its slide. The ruble has fallen about 20% since January. Elvira Nabiullina, head of the bank, acknowledged earlier this month that if markets turned against the ruble it would not "be able to restrain them" but is nevertheless compelled to act to protect Russian businesses from the impact of sharp falls.
Sharp falls hurt firms with foreign suppliers or foreign currency debt obligations and could further undermine already weak economic growth in the country. The Russian central bank has tried to smooth the transition to a weaker exchange rate through its interventions, but it is paying a high price.
Russia's international reserve stockpile has fallen from $464.2 billion at the start of September to $443.8 billion as of Oct. 17, and it will have dropped even lower because of further intervention in recent days.
As a signal of how big a problem the ruble's collapse has become for policymakers, the central bank announced plans to pump an additional $50 billion into the country's banking system through currency repo auctions (whereby the central bank exchanges rubles for dollars at a fixed rate). The first auction is scheduled to be held Wednesday.
Read more: http://www.businessinsider.com/russian-ruble-falls-to-new-record-lows-2014-10#ixzz3HarDg8jPRussia has much gold and oil and China - theY will be fine, THE USA ON THE OTHER HAND HAS OBOLA
greenslime is a disgusting piece of shit - a chameleon treasonous whore.
There's always been a little bit of truth with Greenspan unlike Bernanke or now Yellen.
When Greenfingers said printing money was "a terrific success", he obviously does not know the meaning of terrific.
terrific
/t??r?f?k/
adjective
1. of great size, amount, or intensity.
"there was a terrific bang"
2. archaic
causing terror.
"his body presented a terrific emblem of death"
This report gives credability to the "Road to Roota" theory. Its a theory that Greenspan was a gold bug, but was forced to abandon the gold standard, so he set the stage for this fiat currency collapse and a return to the gold standard.
Its worth the read : http://www.roadtoroota.com/public/190.cfm
Now that's an interesting conspiracy Rhal.
It is. I'm not sure I believe it yet, but it worth knowing it as a minority report. After all, why would the Fedral Reserve publish a comic book? Just to make me go Hmmm...
That settles it, I'm putting all my money in dried beans!
You play a good game boy.
Now, you die.
FED alongwith the political class is governed and controlled by the Wall Street and have no interest in the real economy. All of their policies and recommendations aim to benefit the bankers at the cost of taxpayers. They do not have the power to reign in the harmful activities of Wall street like speculation, derivatives etc. The whole financial system is an extended part of the crony capitalism which targets transfer of wealth to a miniscule of the population.
The current system is designed to fail as the majority of the population will revolt against the leaders due to their declining living standards.
http://www.marketoracle.co.uk/Article40231.html
So, they redistributed buying power away from the people where it could help the economy to the banks and govenment where it does absolutely nothing for the economy.
One has to also assume that their intention all along was to create a greater dependency on them and now that they have done it, they have decided that they do not want a bunch of useless dependents, so they will try to find a way to flush them.
Usually I'm a metals guy and I am, but "I don't believe in god I believe in ammunition " I ll keep metals. But you need a deterrent, that deterrent is a death you don't want your friends to watch.
Start reloading, I'm sure there are somewhat local types... Locally I'm sure you can figure it out on your own. The brass rivals are pushover take all the lc, sell the rest
God cannot be happy with worshipping metals or ammo.My deterrent is facing God AFTER death
The 3 precious metals: Gold, Silver and Lead
Die Geister die ich rief... Well yes that fits (rough translation, the ghosts I called) Greenspan did not that gold works as money and still he has printed as no FED chef before. The bank chefs after him just followed this "printing" path. That there can't come any good from stealing from every user of the USD, is clear but will be denied till retirement by any central bank worker....
Offtopic, because you won't read it here where Putin is a God to ZH.
Russia and North Korea Discuss Possible Visa-Free Regime, Economic Cooperationhttp://en.ria.ru/russia/20141028/194741630/Russia-and-North-Korea-Discus...
One could say: "Great minds think alike" :D
Soon ZH will tell you how awsome and progressive North Korea is and it's all media lies about our dear leaders Putin & Kim Jong-un.
From what I read on ZH about Kim Jong, people simply see him as "the guy with the funny haircut". Nothing more.
Has it occurred to you that Putin's visa/economic actions with NK may be an attempt to bring NK in the from the cold and to help improve the lives of its people?
"From what I read on ZH about Kim Jong, people simply see him as "the guy with the funny haircut". Nothing more."
Than Hitler - in ZH perspective - would be a guy with funny mustache. ZH has strange morale values.
"Has it occurred to you that Putin's visa/economic actions with NK may be an attempt to bring NK in the from the cold and to help improve the lives of its people?"
When did Kim Jong think how to help it's people? When he send them to die in concentration camps? Or when he ordered mother to drown their illegal baibies?
I'm quite sure that you secretly admire Hitler. But what about your hero The Chocolate Man - aka Poroshenko the fascist dictator - who has killed large numbers of innocents in East Ukraine and destroyed huge numbers of homes? Large parts of East Ukraine resemble a building site nowadays.
Repeating your mantra that Poroshenko=good and Putin=bad doesn't make it true.
Facts dear fellow, facts.
Oh yes --- let's remind you once again of who was responsible for shooting down MH-17 when nearly 300 innocent men, women and kids were blown out of the sky: your hero Poroshenko. Remember all those 30mm bullet holes in its fuselage around the cockpit. Shameful.
Have a nice day and sleep well with all that guilt on your conscience.
So now you are running away from subject I started - that is read hearing right there:
http://youtu.be/exdK7Lirngg
But what else I could expect from such a ruskie troll like you? hah?
Now you are saying that Poroshenko is criminal and there is evidence to prove that (that's you personal claim) so why are these evidence brought to ICJ? For example by one of your dear leaders with Putin and/or Kim Jong Un?
You see - you are trolling - nothing more.
utterly smashed in the middle of the night as US debt fasy approaches $18 Trillion
Gold 1217 down to 1201 Silver 1724 down to 1678 total utter manipulation
Meanwhile bankrupt Japan rallies and the Dow jumps 100 points in the middle of the night
haha record demand for real physical gold....causes price to go down.
TPTB, CBs, BIS, Fed..... scared much?
The continued massive effort by the Fed and friends to keep gold under control tells us all we need to know.
April fools!!!!
Why is that the first thing I thought of when seeing this....headline??
Because of the heavy goldbug cohort on this site, I'll be downed for this. No matter, as popularity is not my concern. Gold and silver as a portion of a well diversifed portfolio is sensible. But "betting" on gold is foolishness. It will never occupy the role that goldbugs unanimously predict it will in the future (after a crisis or reset).
Gold, like all other forms of money or exchange currency, is FIAT. The government dictates what is legal tender, what is money, how much it is worth, what you can do with it, how much it will be taxed, etc. If the government doesn't want gold in use it will prevent it: put an onerous tax on it (it's already 35%!)... confiscate it... make the possession, sale or transfer of gold illegal, etc. So... gold is FIAT too. Government has the power to do this because they control the military, the police, the prisons, the banks, the infrastructure, the communication channels, the internet, etc. and can shut you down in a heartbeat.
Western governments will never allow a gold standard again. It is deflationary. It prevents Congress from borrowing and the government from creating deficits, etc.
It isn't The Fed that is the problem. It's CONGRESS. The Fed is just the enabler that allows the borrowing to occur. It is CONGRESS that switched The Fed's original mandate of only providing liquidity to businesses in a major downturn (by buying corp bonds) to buying US Treasuries and creating liquidity.
I'm of the opinion that we are going to electronic currency. Government needs this so that they can tax to the fullest extent (they are desperate and this will be one of the results from the sovereign debt crisis). They will monitor every penny that goes in and out of your life. No more paying people under the table, buying drugs, guns or prostitutes, paying cash for a discount, etc. You may be able to barter (some eggs for some vegetables) but you probably won't be able to buy anything with all the gold you've stacked, or trade it. Bitcoin could possibly even be a government scheme to get people used to the idea of an electronic currency.
Look at our governments, the IMF, the BIS, etc. Look at their histories and their policies. They are running the show. Marxism, Socialism, Fascism and Authoritarianism will continue to grow and rule. It isn't difficult to predict where this is going. Whatever currency we have, it will be FIAT.
And with your electronic currency there will come a robust black market with need to barter. Further, just because the USSA goes to an electronic currency does not mean that other nations will follow.
Go Ahead .. Be A Realist ! But I prefer my reformist Libertarian fantasy !
I like your post, but I take exception to your statement that gold is fiat. It's not. Gold is what people choose as money when they are permitted to choose freely. Gold is the ideal money, or as close to ideal as we have here on earth, which is why we choose it (when we can).
If that doesn't convince you that gold is a sell nothing will. Fact of the matter is gold & silver (and the miners) are in a primary bear market.
http://www.dowtheoryinvestment.com/2014/10/dow-theory-update-for-october...
I know, it's crazy. You'd think with all the QE they would be going through the roof. And they probably will when all those excess reserves start to generate loans as the "you didn't build that" economic agenda ends. But until then, why would you buy? Notwithstanding Greenspan's investment advice, of course...
ZH is awash with pissed off gold bulls that have had their clocks cleaned. They tire easily of having salt scrubbed into their wounded egos.
Enjoy your FIAT money while you can, dude.
That's because ZH is full of people who love gold without understanding gold.
It is agreed that the US govt could try to find legislative ways to control the use of gold in its economy to the effect that none gain great advantage from a failed USD.
The effectiveness of these would be dubious, since in such an economy there would have be substantial breakdowns of processes and govt employement, and regulatory infrastructure....and the move to 'lawlessness' among the people very high. Look at black economies Spain, Portugal, Greece etc.....
Also in a failed economy the TPTB would be happy to allow gold to be used since all would have some in some form or other, and would give the public some little wealth to survive...rather than attack TPTB. See China...encourages its poplace to own gold...for this reason no doubt. See also Zimbabwe were gold allowed people to survive...specs of gold buying food.
But yes if the TPTB were determined to limit the use of gold in a failed economy it could do so, at great expense to itself. This isn't the 1930s.
Gold isn't fiat...it has a limited supply on earth. fiat has an unlimited supply...being digital it isn't physically restricted.
Gold cannot be diluted by production from thin air.
Gold has and will purchase neccessities across all global boundaries through all millenia.
Fiat's worth is comparative and dependent on strength of economy against amount of fiat 'printed' and in comparison against other countries.
The USD would now be worth a small fraction of its already heavily diminished current purchasing power if other economies hadn't also debased their currencies.
The USD reserve status and the advent of competitive currency debasement is whast keeps the USD and US economy out of the abyss.
That the US must continue to debase its currency at $1trn pa in order to stay afloat puts increasing pressure on a cracked vessel that is the USA hegemony/economy/State.
The paper price of gold, ie the 100/1 leverage of sold gold to actual held physical gold puts proper value of it at around upto $120,000/oz. if all physical against the paper had to be produced at once. Not that this would happen.
Irronically one of the ways out of its current mess, though not one that would save all the pain...would be the adoption of a gold standard and reset....
In the end something has to break because nothing has been fixed....and all things getting worse and worse..
On technical charts gold is in a bear market...as much as technical charts matter when the paper price of gold is a factor of the intention of TPTB.
In other words the charts are not a determination of where gold is at. It is dependent on other factors. Wihtout Fed/TPTB intervention that hit hyperdrive a few years back gold would be well into the $2,000s and silver over $50.
The factor the affects the paper price of gold is for how long can/will the TPTB keep its extreme naked short selling on thin markets..... this is something that can break/cease at anytime due to unforseen black Swans, competitor valuation mechanisms, intention, coordinated attack by countries....
That's a lot of justification for a sure bet. Your paragraph reads like a used car salesman.
No offense.
When the reset button is finally hit, it may be that 'bullion' (of the beans, bullets, and bullion survivalist mantra) won't be nearly as 'useful' as the 'beans'...beans you can at least eat, bullion, not so much...
Investing in seeds and gardening supplies might be a better 'investment'.
http://olduvai.ca
How ya gonna keep your beens without bullets champ?
Greenspan plays a golden Obozo.
Is he changing his name from Greenspan to Goldspan next?
After SIX years of denials...
He is SAYING this!
{How much time is ample time to give an addict to get their azz out of denial and into recovery?}...
¡Pero qué haces?
¡Es increíble!
Este Blanco Europeo Asqueroso y Repugnante..
Porque no lo callan y lo mandan a un “Manicomio”.
Saludos.
While I agree with Greenspan's statements about the results of QE, I sense he's in search of restoring his own tarnished legacy, which is not going to happen.
Three D printers are the next huge technological wave. They will change industry as we know it in the next ten years. Presently the advances are in aerospace but will soon filter down to more mundane industries. My associate has a half-million dollar machine that can sinter powdered titanium. It allows for the manufacture of pieces that cannot be cast or machined. Simply amazing.
What a two-faced prick.
There was high class bullion merchant with international offices (forget which company) on either Kerry Lutz or GoldSeek Radio this year who said that a certain, not-to-be-named customer was a former Fed chairman. Every month he travelled to a foreign country, bought $100k in gold from said merchant and then vaulted the gold locally at the overseas purchase point.
This was before Yellen.
I thought it had to be AG. He used to understand and like gold way back and he would have the budget to pull this off month after month.
It couldn't be Ben B, who is poor and doesn't understand gold.
It might be Volker although I am unclear about his riches being sufficient for this caper.
The others are dead.