Greenspan's Stunning Admission: "Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It"

Tyler Durden's picture

For some reason, the Council of Foreign Relations, where ex-Fed-Chief Alan Greenspan spoke last week, decided the following discussion should be left out of the official transcript. We can perhaps understand why... as Gillian Tett concludes, "comments like that will be turning you into a rock star amongst the gold bug community."

 

Greenspan (Uncut):

 

TETT: Do you think that gold is currently a good investment?

GREENSPAN: Yes... Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can macth it.

 

Which is missing from the official CFR transcript...

GREENSPAN: ...remember, we had that first tapering discussion, we got a very strong market response. And then we reassured everybody to have no -- remember, tapering is still (audio gap) of an agreement that the central banks have made -- European central banks, I believe -- about allocating their gold sales which occurred when gold prices were falling down (audio gap) has been renewed this year with a statement that gold serves a very important place in monetary reserves.

 

And the question is, why do 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 a very few exceptions, all of the developed countries have gold reserves. Why?

 

TETT: I imagine right now, it's because of a question mark hanging over the value of fiat currency, the credibility going forward.

 

GREENSPAN: Well, that's what I'm getting at. Every time you get some really serious questions, the 50 percent of the gold price determination begins to move.

 

TETT: Right.

 

GREENSPAN: And I think it is fascinating and -- I don't know, is Benn Steil in the audience?

 

TETT: Yes.

 

GREENSPAN: There he is, OK. Before you read my book, go read Benn's book. The reason is, you'll find it fascinating on exactly this issue, because here you have the ultimate test at the Mount Washington Hotel in 1944 of the real intellectual debate between the -- those who wanted to an international fiat currency which was embodied in John Maynard Keynes' construct of a banker, and he was there in 1944, holding forth with all of his prestige, but couldn't counter the fact that the United States dollar was convertible into gold and that was the major draw. Everyone wanted America's gold. And I think that Benn really described that in extraordinarily useful terms, as far as I can see. Anyway, thank you.

 

TETT: Right. Well, I'm sure with comments like that, that will be turning you into a rock star amongst the gold bug community.

*  *  *

As a reminder, here is Ben Bernanke putting people straight on Gold...

As we noted at the time,

Ron Paul asks the Bernanke if he thought gold was money. Bernanke almost swallows his tongue, stares blankly for a few seconds and then says, “no.”

 

Paul then asks why banks hold gold on their balance sheet?  Why not diamonds?  Bernanke says, “tradition, I suppose.” 

 

So let me get this straight, banks hold billions of dollars of an asset that pays no interest or dividends on their balance sheet for reasons of "tradition".  nothing to do with anything else, just tradition.  uh, yea.  That must be it.

*  *  *

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jefferson32's picture

Shit is hitting the fan on November 18, 2014. It is already well ordained. Here is a 11-day advance heads up. Oh, and November 18 is "occult day".

 

l1b3rty's picture

The general public is not buying retail bullion. Miners are losing money. The Republicans are in office, people think that is good for fiscal policy. Go Republocrats! Better than the Republocrats, at least...Demand has been scared away. Most people dried up liquidity in their middle class savings accounts around $30 silver. Diversification is key, my brothers and sisters...Gold,silver,bitcoin

Silky Johnson's picture

Is this motherfucker off his meds? He's going to get himself JP Morganed talking this kind of shit.

BaBaBouy's picture

Like I Said Earlier, He Was Pro GOLD Way Way Back...

Before The FED Gig, I Think He Admitted To Holding GOLD On Ruckheisers Program.

Listen Up To The Old Coot...!

dontgoforit's picture

Guess this means gold will be down another $25.00/oz within the next couple of days.

Ignatius's picture

Who is telling us? (Greenspan/Fed)

Why are they telling us?

Why are they telling us now?

Save_America1st's picture

that old fart must be getting ready to die soon.  Seems his guilty conscience has caught up with him and he's trying to clean up his "legacy" before he kicks the bucket.

BellyBrain's picture

No, he's not feeling pangs of conscience.  He doesn't have a conscience.  He is setting us up to be bagholders once again.  Last time he talked up gold, it sank.  Will it sink again?  We'll see.

JLee2027's picture

I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said.

- Alan Greenspan

halfasleep's picture

Fuck Greenspan.

 

.. logged in just to say that. And I don't like to swear.

Four chan's picture

greenspan you back peddling son of a bitch.

Bananamerican's picture

also stricken from Greenspan's remarks: "Christ is Lord"

economics9698's picture

From the lips of the MF’er that lowered the fed funds rate to 1% in 2003-04.  Fuck you, hell awaits your arrival.  Back stabbing MF’ers all of them.

SoilMyselfRotten's picture

He'd jump off a building if he could walk a flight of stairs

zerozulu's picture

finally, tribe is loaded up to the wazoo. Gold to 5000

drdolittle's picture

It's going to be confiscated again? Buy now people then.gov gets it for free, fuck you plebians.

Tall Tom's picture

They cannot confiscate jewelry. They considered that in 1933 and then realized that they could not properly evaluate it.

 

Fourteen Karat is not anywhere rapidly deliverable on the World Markets. They'd have to refine it. That takes time and energy. Gold Jewelry is safe.

zerozulu's picture

you need not to be a rocket scientist to convert 24 carats in to 14 carats. from 14 to 24 is a different thing.

Tall Tom's picture

Well you do not need to be a Rocket Scientist to refine Gold either but that background helps.

 

Good post.

old naughty's picture

"He Was Pro GOLD Way Way Back...

Before The FED Gig, I Think He Admitted To Holding GOLD On Ruckheisers Program."

Yes, he was a (gold) rock star way way back...Before The Fed Gig...according to Bix Weir.

 

MontgomeryScott's picture

SO,

YOU and Bix Weir seem to think that Greenspan was a Gold Bug WAY BEFORE the Federal Reserve Act of 1913 (nineteen fucking thirteen). This would mean that he has been alive for at LEAST 120 years (one hundred fucking 20 years), as the Act itself happened 101 (One Hundred and fucking One) years ago (making him perhaps 19 when he decided to become a 'gold-bug').

Bix Weir seems to be 'one of THEM', and you, unfortunately, seem to be pushing his agenda.

REALLY? You BELIEVE this shit this 'Weir' guy sttates without FACT-CHECKING?

A Nanny Moose's picture

I think he is talking about Yoda being Fed Chairman. Prior to that Fed Gig, he wrote the article for Rand.

MontgomeryScott's picture

You might have a point.

Before he was Fed chairman, 'YODA' spoke of the reality of GOLD being the true currency. WHILE he was Fed chairman, he denounced that statement. AFTER he retired, he once again spoke (as witnessed here) about the reality of GOLD being the true currency.

The FED GIG, however, goes on and on (and on and on, and on, and on...).

Even Black Sabbath recognized the duplicity of this tribal fuck and his ilk (after 9 years of the OPEC accords brokered by KISSINGER):

https://www.youtube.com/watch?v=VUjUIP2ugG4

I assume you are speaking of the RAND Corporation, so famously satirized by the movie 'Dr. Strangelove (or, How I Learned To Stop Worrying And Love The Bomb)'.

 

jbvtme's picture

the tribe is saying buy gold?  i don't like the odds

conscious being's picture

This is for the I-told-you-so's in the rewritten history. IMO, story will have to age like a red wine for a while.

r00t61's picture

He is talking not about the creation of the Fed - which as you point out occurred in 1913 - but rather, Greenspan's tenure as Fed Chair, which was from 1987 to 2006.

Greenspan famously wrote an article in defense of gold in 1966, originally printed in Ayn Rand's newsletter:

http://www.constitution.org/mon/greenspan_gold.htm?PageSpeed=noscript

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. Ifone grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

Now, despite his long and public background as a free market libertarian, during his time as the Fed Chair, Greenspan was the architect of two of the largest bubbles in US economic history.  The tech bubble (1999-2000) and the housing bubble (2004-2006), both made possible by his low-interest rate policy.

He even later blamed the 2008 Global Financial Crisis as "a failure of capitalism to regulate itself."  In his memoirs, he basically blames everyone - EXCEPT HIMSELF - for the world's financial problems, an attempt to preserve his "legacy."

I personally thought that he would be reduced to nothingness after his memoirs, speaking at economic conferences for the rest of his life and collecting the fees.

Now we have him coming out recently and saying things like "gold is real money" and so forth, returning to his roots.  The big question is why?  The theories that I've seen swirling about:

1.  He feels guilty

2.  He's getting paid to do it

3.  He's a secret libertarian double agent, destroying the system from the inside

Personally, I think he was consumed by the Dark Side of the Force when he became Fed Chair, and he's basically senile now.

Pinto Currency's picture

 

 

He was a toady for Ayn Rand.

Then a central planning Federal Reserve toady for the banks while they stripped America of its wealth.

Now he figures it is in his interest to be back on the side of gold.

Not My Real Name's picture

Yep, definitely a toady for the Fed. Ayn Rand -- no; based on Greenspan's early writings on gold, I have no doubt that he truly believed in honest money, but sold his soul and his convictions after joining the Fed.

As a result, he is simply a pathetic turn-coat who is trying (in vain) to save his soiled reputation. The Fredo Corleone of economists.

 

MontgomeryScott's picture

You don't need to be a rocket scientist to understand that 'karats' were created and put into use by crack dealers (oops, I mean, 'gold' dealers) in order to cover up the fact that their shit was CUT; I.E., purity was compromised.

Note that The Grienshpawn is speaking to a CFR meeting. Sometimes the lower and middle management types need a reminder as to the true wealth types; due to the decades-old psyop that has been played on the masses (since some of them can't stay on task, and some of them aren't even Tribe members [but they are useful eaters, nonetheless]).

Take your bag off, 'zerozulu'. Fucking amonymous avatars are too easy to peg as interlopers.

Converting 14 Karats to 24 Karats involves a considerable waste of resources, but it can be done. The loss of the real material almost overcomes the gain in value.

{EDIT}

I'm NOT the one who downvoted you.

BaBaBouy's picture

FYI... When GOLD is mined, its almost always alloyed with other metals, it could be .01% .2% actual Gold.
Even rare nuggets are not pure 24K.
It all has to be refined to 24K.

24K GOLD is Soft... To use GOLD in Jewelry and Art you have to alloy it to your requirements to
make it durable...
It also makes various color variations. Its STILL GOLD...

In refining karat GOLD back to 24K, properly done there is actually almost no loss.
Atomic GOLD is extremely stable, thats why its GOLD.

Greenskeeper_Carl's picture

exactly. You don't want a 24k wedding ring. In my opinion, there is no reason why a man who ever does anything with his hands should have a wedding ring over 14k.

Tall Tom's picture

I have two 24K Split Back rings made from a Maple Leaf. They are very soft.

 

If I am working with my hands and they get caught on something they are torn from my finger and to not tear my finger off.

 

If your 14K full band were to catch on something then it may just take your finger off with it.

Carpenter1's picture

Vancouver financial advisor 

http://www.vancouverfinancial.net/

Vancouver financial advisor 

StillSilence's picture

aren't they just telling us because they must? It's certainly not as if most people are listening anyway....gold will almost undoubtedly become a real pillar once again in global finance...heads up world.

Tall Tom's picture

Just what do you think that price supression is about?

 

Do you want to spend more of your fiat currency for the same amount of Gold?

 

Do you think that Greenspan might have been doing you a favor?

 

Come on...What message is louder that you need to be buying Gold then that when it is put on sale?

 

There was this woman in France during World War II. She was employed by the Nazis as a secretary.

 

The people in her town spat upon her and called her all the vile names which they could think of. They believed her to be a Nazi COLLABORATOR.

 

Finally the Nazis fell and withdrew from that town in the south of France. The townsfolk lined her up and were about to shoot her for her "crimes".

 

Then the British stepped in and stopped that madness. She was one of the very best DEEP COVER SPIES for the Allies. She was one of the Good Guys and suffered the abuses of her neighbors FOR MANY YEARS. She could not tell anyone what she was doing.

 

At times the best way to change the system is to demolish it from the inside because there is no saving of this system...at all.

 

This system is coming down due to Greenspan's work.

 

There was no saving it possible then.

 

There is no saving it now.

 

Bix Weir is correct. I have known it for quite awhile...well before he even publicized it.

 

Greenspan is one of the Good Guys.

 

So go ahead and downarrow this post.

 

But like that French lady...I know the Truth.

 

From my many posts you know that I do not like Central Banksters...

 

Why don't you open your eyes.

 

It is about time after all.

The9thDoctor's picture

This system is coming down due to Greenspan's work.

I gave you an upvote because your insight is different, not that I agree or disagree with it.  Greenspan was in Ayn Rand's "collective" after all.

old naughty's picture

TT,

Greenspan is not alone.

Look at the 'new' 100 dollar bill.

You can say there's duality...

two sides.

Tall Tom's picture

That is my hope at least.

Pinto Currency's picture

 

 

Greenspan helped shut-down the warning signals in the monetary system (gold price, CPI measure, etc.) then ran the monetary system in such a way that the US was basically looted by the financial sector.

Those who want to portray him as a revisionist hero now, are welcome to do so shouting out their praises to Greenspan as chaos spreads across the West and starvation stalks 'civilized' countries.

Well done Greenspan.  The economy is collapsed and most did not see it coming.

 

Escrava Isaura's picture

 

 

 

Not sure which Greenspan makes sense….. If anything, Go Figure!

 

The Austrian School claimed that the Great Depression was the result of a credit bust.  

Alan Greenspan wrote that the bank failures of the 1930s were sparked by Great Britain dropping the gold standard in 1931.

This act "tore asunder" any remaining confidence in the banking system. Financial historian Niall Ferguson wrote that what made the Great Depression truly 'great' was the European banking crisis of 1931.

According to Fed Chairman Marriner Eccles, the root cause was the concentration of wealth resulting in a stagnating or decreasing standard of living for the poor and middle class.

These classes went into debt, producing the credit explosion of the 1920s. Eventually the debt load grew too heavy, resulting in the massive defaults and financial panics of the 1930s.

 

http://en.wikipedia.org/wiki/Gold_standard#Depression_and_World_War_II

 

 

Pinto Currency's picture

 

 

The Bank of England in the 1920s ran interest rates by agreement with the Fed at a discount to the US rates causing UK capital to flood over to the US while the Fed also ran loose money policies.  The BofE then raised UK interest rates to a premium to US rates sucking capital out of the US triggering the bubble pop.

http://archive.mises.org/6615/lionel-robbins-the-great-depression/

 

Bay of Pigs's picture

An interesting theory, but to think Greenspan is "one of the good guys" when he worked alongside assholes like Bob Rubin and Larry Summers targeting gold (the Gold Carry Trade, and price suppression efforts), for so many years I find it hard to reconcile his motives.

Personally, he appears to be a no good, evil, rotten bastard, Central Banker to me.

Tall Tom's picture

Just remember that appearances can be deceiving.

 

That French Spy also appeared to be someone who she was not.

 

She was working for evil, cut throat, murderers also.

 

BTW it is not a theory in the strictest sense of that word.

 

It is evidential.

 

And over the years it is quite clear where my stance on lies, fraud, deceit and murder is. You know where I stand upon that.

 

You know that I hate the banksters.

 

Look at the IMPORT/EXPORT data on Gold in the 1990s when Greenspan was in power. Look at my post which references jewelry. It is pretty clear what he was doing.

 

He was divesting the National Gold into the hands of the people in a non confiscatable form.

 

You have heard of the phrase, "Follow the Money"?

 

You have heard me state that "Gold is MONEY". I have not once wavered from that position.

 

Then FOLLOW THE GOLD.

 

I have made it my principal business to do just that over the last 3 decades.

MontgomeryScott's picture

I get it!

Let me apologize for any statements made against Greenspan. He simply led the United States into the current situation where it's economy is set to collapse overnight, and instituted some of the largest frauds in economic history (along with the failed policies that led to the Housing Crash of 2008, etcetera), because he was 'doing god's work' as a 'counterintelligence agent'. He wasn't doing anything wrong, you see, because he just came out and recanted his entire fucking career at the Fed. NO! he was a SPY (a 'TURNCOAT', as it were), simply passing INTELLIGENCE ON to the people who could STOP THE ENEMY during his ENTIRE FUCKING TENURE.

Yeah, I get it now.

Thanks for your insight. I never realized what a GOOD MAN he was.

Tall Tom's picture

Ronald Reagan tried to stop the enemy...

 

He was shot.

 

John Kennedy tried to stop the enemy...

 

He was killed.

 

When those whom are destructive to others set out to kill themselves...

 

BY ALL MEANS GIVE THEM SOME SLACK...FEED THEM THAT ROPE.

 

You have to understand. When stomping on the brakes does not work then you depress the accelerator TO THE FLOOR as it is the only tool and device which you have available.

 

And they, the FED and the Government, disabled the brakes on this runaway train back on August 15, 1971.

 

You can thank PAUL VOLCKER for that. He engineered it and Nixon implemented it. (Volcker was not even Fed Chief at the time. But it was HIS PLAN.)

 

Reagan tried to enable the brakes (Gold Standard) and he was shot for it.

 

Just what would you have done different?

 

Get a clue.

Tall Tom's picture

You can downarrow that post all that you want.

 

I do not care.

 

The Gold Standard was suspended and the marketplace turned into FRAUD on that Sunday night.

 

In good faith the Europeans took our currency because it was believed to be as good as Gold.

 

And then Nixon fucked everyone who held US Dollars...EVERYONE...including the American people.

 

Gold is that which disciplines a Government and its Central Bank to NOT produce COUNTERFEIT MONEY.

 

That Sunday Night  in August this Nation was transformed into a bunch of COUNTERFEITERS.

 

And I think it is now time to receive that which we have sown.

 

BRING THE SYSTEM DOWN AND KILL THE SATANIC BEAST which you support, SATAN.

tocointhephrase's picture

Alan, you are a disgrace, look in the book! I will give you a clue........

$ilv€R £itcheZ!