Alan "Bubbles" Greenspan Returns To Gold

Tyler Durden's picture

Authored by Bonner & Partners' Bill Bonner (annotated by Acting-Man's Pater Tenebrarum),

Faking It

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. […] 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.

— Alan Greenspan, 1961

 

LA5H5981sc President George W. Bush presents the Presidential Medal of Freedom to Federal Reserve Chairman Alan Greenspan

He was in it for the power and the glory… Alan Greenspan gets presidential bling affixed to his neck by GW Bush, the English language mangler

 

That old rascal! Before joining the feds, former Fed chief Alan “Bubbles” Greenspan was a strong proponent of gold and the gold standard. He wrote clearly and forcefully about how it was necessary to restrain the Deep State and protect individual freedom.

Then he went to Washington and faced a fork in the tongue. In one direction, lay honesty and integrity. In the other, lay power and glory.

Under the Bretton Woods monetary system, the U.S. promised foreign central banks that it would convert their dollars to gold at a fixed price of $35 an ounce. This constrained the amount of dollars the U.S. could print to the amount of gold it had in its reserves.

A smart man, Greenspan quickly realized he could not advocate for this old, tried-and-true gold standard and run the Deep State’s new credit money system. In 1987, he made his choice. He took over the top job at the Fed and faked it for the next 19 years.

Since 1978, we have had four different Fed chiefs. Some were smart. Some were honest. Only Paul Volcker was smart and honest. Bernanke was honest… we believe. As near as we can tell, so is Janet Yellen. Both may mean well, but both are careful not to think out of the Deep State box.

Alan Greenspan was smart. But he is a scalawag. He knew all along that the system was corrupt and self-serving. He had explained it in essays he’d written prior to joining the Fed.

 

1998_Time-MagCover_Greenspan-committe-save-world

The committee, that in hindsight, actually screwed the world (here’s a little hint for TIME, for next time: “committees” have never saved anything). A bunch of quintessential Deep State minions…

 

But he also knew he would never get his picture on the cover of TIME magazine if he told the truth. In 1999, Greenspan eventually got his mug on the cover. The magazine pictured him alongside then Treasury secretary Robert Rubin and his deputy, Larry Summers, under the headline “The Committee to Save the World” for their handling of the Asian financial crisis.

It was power Greenspan wanted; he knew he would have to play the Deep State’s game to get it.

 

Golden Period

Now, Mr. Greenspan is 90 years old. Either he feels the cold downdraft of the beckoning grave… or he is simply forgetting to mumble. In an interview in the wake of Britain’s decision to end its membership of the European Union, he had this to say:

If you look at human history, there are times where we thought that there was no inflation and everything was going fine. […] The oil prices have had a terrific impact on global inflation and [I] would not be surprised to see the next unexpected move to be on the inflation side. You don’t have it until it happens.

 

1-CPI

CPI y/y rate of change… Greenspan has a point – there can be “no inflation” for a long time, and then you suddenly “have it” – click to enlarge.

 

The former Fed chairman says he believes another debt crisis is inevitable. He believes it will lead to high levels of inflation. His solution? Gold:

“Now if we went back on the gold standard and we adhered to the actual structure of the gold standard as it exists let’s say, prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the U.S., and that was a golden period of the gold standard.

 

2-US-GNP-per-capita-1869-1918

He’s right about the pre-Fed decades as well. Real economic growth in the US has never been faster or more equitable than under the gold standard in the much-bewailed “Gilded Age” (much-bewailed by leftists that is – they hate economic progress and free markets) – click to enlarge.

 

The Fed’s minutes from its last meeting reveal no intention to return to the gold standard. Instead, the Fed’s central planners want their photos on TIME, too. They can’t give up their control of the nation’s money or risk a correction. It would be “prudent to wait for additional data” before raising rates, they say.

Mr. Greenspan might have said so, too – perhaps with a hidden, sly smile on his face.

 

Misbegotten Bubble

We have been connecting dots; we want new readers to see what we see, so we can all look at some more dots together. Like everything else in economics and the markets, credit is cyclical.

At the beginning of an expansion, people borrow more and more. Then, when they have borrowed too much, they cut back, they default, they trim their expenses… and they trim their debt.

The expansion phase – like the bull market on Wall Street that usually accompanies it – is a happy time. People feel richer and smarter; they feel their hair grow and their private parts swell. Then comes a less happy time, full of blame and regret…

“You should never have bought that boat,” says the nervous wife.

“I told you we didn’t need that extra warehouse,” says the worried business partner.

“I thought a degree would increase my income,” says the college graduate, as he takes your order.

The EZ money is supposed to beget an asset boom, which is supposed to beget an economic boom, which is supposed to beget the wealth that will pay off the extravagant borrowing that the credit expansion begat.

 

3-PNG_Web_MGI_Debt_ex_1

By now the McKinsey report on global debt has become a little dated…if is fair to assume that debt growth has continued at the same pace. While government debt growth rates have slowed slightly since this report was published (Q2 2014), corporate debt growth has taken off like a rocket – click to enlarge.

 

“Higher stock prices will boost consumer wealth and help increase confidence, which will also spur spending,” said an earnest, but perhaps dim, Ben Bernanke in 2010.

“Increased spending will lead to higher incomes and profits that… will further support economic expansion.”

Six years later, all we see is a misbegotten credit bubble and $60 trillion more, worldwide, of debt.

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balz's picture

Wait... The quote about the abandonment of the Gold Standard is from 1961?! Wasn't that abandonment in 1971?

bamawatson's picture

the man is forced to see andrea mitchell naked, and hear her screeching voice; he suffers enough

Fester's picture

Since 1978, we have had four different Fed chiefs. Some were smart. Some were honest. Only Paul Volcker was smart and honest. Bernanke was honest… we believe. As near as we can tell, so is Janet Yellen.

WTF

I stopped there

Off with their heads and don't forget to include ALL family members, this must be stopped.

MalteseFalcon's picture

Sippenhaft?

Surely you can't mean that.

What about our beloved dynasties?

thinkmoretalkless's picture

That will bring you to your senses like a whiff of smelling salts

yrat's picture

i've always wondered if greenspan purposely expanded credit into a doomed bubble knowing full well the end result of such an action.

 

 

Escrava Isaura's picture

That’s why you don’t listen to economists, priests, and politicians, because their level of self- deception, disregard for geology, while selling you a corrupted/bankrupted ideology.

 

Economist Alan Greenspan: Now if we went back on the gold standard…….., we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the U.S.

 

What Greenspan forgot to tell you is that, in 1870 US population was 38 million people. US had the best coal reserve (anthracite) and oil exploration was on its infancy.  

 

 

MalteseFalcon's picture

The US population was also fairly homogeneous and parasite free.

max2205's picture

Roll out the flimmflan men....fuck off

MalteseFalcon's picture

The truth is like the sun. 

You can block it out for a while, but it isn't going anywhere.

duo's picture

US Grant rode to the White House after his inauguration on a horse-drawn carriage.  The white house was lit with candles and perhaps oil lamps.  Food was grown pretty much as it had been for 2000 years.  Sanitation was essentially holes in the ground and the nearest creek.

McKinley rode in an automobile to a White House lit with electric lights.  There was running water.  The first airplane flight was 3 years away.  Infectious diseases were beginning to be understood.  Bridges and buildings being made out of steel, with an infrastructure of steel mills to supply it. Radio signals across the Atlantic Ocean were only months away.

It truly was the most remarkable transformation of human life for a 30 year period.  The standard of living of an American doubled in those 30 years, not because wages doubled (they stayed the same), but because prices declined from higher productivity.

Were there panics and depressions?  Yes, there's always a business cycle.  Knowing that a dollar 20 year in the future would buy the same or more as a dollar today is a lot different than having a fiat currency that is inflating, realistically, at 8% a year.

Not My Real Name's picture

"That’s why you don’t listen to economists ... because their level of self- deception, disregard for geology, while selling you a corrupted/bankrupted ideology."

Oh, that's rich ... coming from a first-class socialist like yourself, Escrava. 

This is why I don't listen to you.

NoBillsOfCredit's picture

1971 was the final abandonment. However; when the Fed was established (1913) was the initial abandonment. At that time then Banks were allowed to issue their FEDERAL RESERVE NOTES if they had IOU Notes from others. Before that they had to have gold or silver coin to back the Notes they issued. The fact is that the Constitution established a SILVER standard not a gold standard. Early on the Banksters and "lovers of paper money" fought to get control over the Nation's money. With the establishment of the Bank of the United States and its destruction by President Jackson, to reducing the amount of silver in the subsidiary coins so that they contained less silver than the Dollar (i.e. 10 dimes contain less silver than a dollar) in the 1850s (I think it was 1856). We should be on a Silver and Gold standard where the primary coin is silver and the secondary coin is gold. The money of account of the United States is supposed to be the "dollar" which was scientifically determined to be a coin containing 371 4/16 grains of fine silver. That is the ONLY dollar there is. What we have now is NOT "dollars" despite everyone using that term. We currently have a version of FEDERAL RESERVE NOTES that are no more than paper script. You have a lot to learn. Start with this book: https://archive.org/details/TheComingBattle Free on the Internet, published in 1899.

gregga777's picture

Here's hoping that Alan Greenspan loses his head at the guillotine!

RaceToTheBottom's picture

Quick before he goes totally senile...

Midas's picture

Early in his life Bubbles was all about the Gold Standard.  Late in life he apparently is also all for the gold standard.  So in his long, long life, the only time he wasn't for the gold standard was while he was in a position where he could do something about it!  Does that qualify him as a douche?  What is below douche?

o r c k's picture

That qualifies him as psychopathic human scum. A complete waste of supernova building blocks. (Mankind needs to learn that politics and high level economic positions attract this kind of monster, and beware.)

Ignatius's picture

These Greenspan images would make great dart boards.  Anyone working on this?

Hypocritese, meet thy spawn.

gregga777's picture

Democratic President Franklin Delano Roosevelt destroyed the gold standard by stealing American citizens gold and destroying enforceability of contracts containing gold clauses in his first term in office 1933-1937.

Anonymous_Beneficiary's picture

Roosevelt merely issued the final, symbolic blow to a system which had already long been under decay. There was only ever enough gold to satisfy but a small percentage of the contracts at any given time.

"American citizen" is synonymous with slave. 14th amendment citizens of the 10x10 sq. mi. district of criminals.

 

http://savingtosuitorsclub.net/showthread.php?407-Constitutional-Citizen...

 

Is anyone really even a citizen at all? Prove it..

SimpleJackBlack's picture
SimpleJackBlack (not verified) Jul 10, 2016 1:14 PM

Why do the people need to keep throwing money into the hole the bankers are still digging? Just throw the dirt on the bankers and be done with it.

Arrowshot's picture

Bubbles better be careful. There might be a pillow or mal-adjusted nail gun in his future.

The Duke of New York A No.1's picture

Now that he doesn't have access to the PRINTING PRESS; he wants something in place to protect his money.

SHEEPFUKKER's picture

Ben Bernanke was honest, so is Janet Yellen. I stopped reading after that.

Here2Go's picture
Here2Go (not verified) Jul 10, 2016 1:43 PM

"The committee, that in hindsight, actually screwed the world (here’s a little hint for TIME, for next time: “committees” have never saved anything). A bunch of quintessential Deep State minions…"

 

Rhymes with 'screwed' 

brewed, feud, queued, renewed, stewed, rude. I'm sure ther are a few others hidden in plain sight.

NoWayJose's picture

Too many establishment types are now positive on gold - that's scary!

Latitude25's picture

For a guy who should know how much gold is in Fort Knox to call for a gold standard indicates that the 8000 tons may actually still be there.

NoWayJose's picture

Doubtful he was ever there. He still thinks the 1953 report is accurate. Even if he came they would only show him one vault full of gold.

o r c k's picture

How funny, the gold in Fort Knox is owned by "the people". The people however are not even allowed to look at it--much less, count it.

  And the Federal Reserve?  Not even a President is allowed to look at their books.  Fascism, with the Federal Reserve at the top.

ISawThatToo's picture
ISawThatToo (not verified) Jul 10, 2016 2:01 PM

Banbait #384

"That old rascal!" Not a "rascall," but one of the devils.

Protocols 3:11 "...We shall create by all the secret subterranean methods open to us and with the aid of gold, which is all in our hands, a universal economic crises whereby we shall throw upon the streets whole mobs of workers simultaneously in all the countries of Europe [The West]..."
 
Protocols 5:6 "...All the wheels of the machinery of all States go by the force of the engine, which is in our hands, and that engine of the machinery of States is - Gold. The science of political economy invented by our learned elders has for long past been giving royal prestige to capital [Fiat-Capitalism/Crony-Capitalism]."

Protocols 20:22 "You are aware that the gold standard has been the ruin of the states which adopted it, for it has not been able to satisfy the demands for money, the more so that we have removed gold from circulation as far as possible."
 
Rabbi Reichhorn's 1869 Protocols 9 "Let us try to replace the circulation of gold with paper money; our chests will absorb the gold, and we shall regulate the value of the paper which will make us masters of all the positions."

And from 2,000 years ago:

"The next thing is that charge about the Jewish gold...I will speak in a low voice, just so as to let the judges hear me...As gold, under pretence of being given to the Jews, was accustomed every year to be exported out of Italy and all the provinces to Jerusalem, Flaccus issued an edict establishing a law that it should not be lawful for gold to be exported out of Asia. And who is there, O judges, who cannot honestly praise this measure?" --M. Tullius Cicero, For Flaccus, C. D. Yonge, Ed., http://www.perseus.tufts.edu/hopper/text?doc=Perseus%3Atext%3A1999.02.00...
 

"Softly! Softly! I want none but the judges to hear me. The Jews have already gotten me into a fine mess, as they have many other gentleman. I have no desire to furnish further grist for their mills." --Cicero, First century B.C. Roman statesman in his oration in defense of Flaccus

The greatest trick the devil ever pulled was convincing the world that he isn't Jewish.

Pumpkin's picture

Well, he's still going to hell.

SubjectivObject's picture

It's a trick.

He's tricky.

The devil is in the details.

The oligarchic status quo has no reason to concede anything.

And there he is in the details.

Aubiekong's picture

we need a deck of playing cards with a pictures and a list of their crimes...

Gorge Soros  - Ace of spades

Alan Greenspan - Ace of hearts

Hitlary Clinton -  Queen of hearts

Barak Odumba -  Joker

Bill Clinton - King of hearts

George Bush - King of clubs

 

ISawThatToo's picture
ISawThatToo (not verified) Jul 10, 2016 2:52 PM

Banbait #387

Khazarians do not, and this one is well known not to, tell the truth. When they, he, seem to spout the truth, our task then becomes to identify their agenda.

All the machinations of the Khazarians are to thieve into their hands all the gold that they can. Greenspan is saying then that another scheme has been hatched to plunder, in the name of saving the banks and the nation (TARP 2.0), that gold that may still be out in the hands of the American Goy--Executive Order 6102 2.0.

So far their scheme has been to, against the backdrop of the destruction of the economy, alternate between running gold values up, and then down. An action that, out of the desperation by the American people, flushes gold out to be pawned, and then in to the Khazarians' hands.

Guns and gold in Goy hands are life. In Khazarian hands death.  Guard them well.

Protocols 6:6 "...What we want is that industry should drain off from the land both labor and capital and by means of speculation transfer into our hands all the money of the world, and thereby throw all the Goyim into the ranks of the proletariat [poor]. Then the Goyim will bow down before us, if for no other reason but to get the right to exist."
 
Protocols 22:2 "In our hands is the greatest power of our day - gold: in two days we can procure from our storehouses any quantity we may please."

Protocols 20:16 "The substitution of interest-bearing paper for a part of the token of exchange has produced exactly this stagnation. The consequences of this circumstance are already sufficiently noticeable."

moneybots's picture
"Faking It"

 

That is exactly what Greenspan did.

proLiberty's picture

Alan the Brown-noser. He wrote a well-reasoned defense of gold before he became Fed Head, after which it became very easy for him to create vast oceans of money out of thin air. (which is embezzlement of private wealth by dilution) Now he returns to telling the truth about gold vs fiat money. What a dangerous and evil man, part of a dangerous and evil Establishment, our Wise Overlords.

>>>>

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

"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. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

From the last two paragraphs of Gold and Economic Freedom by Alan Greenspan. 1966.

see: http://www.constitution.org/mon/greenspan_gold.htm