[jiggyboy]

why would the fed worry about the price of gold. the US has one of the world’s biggest gold reserves. so if the dollar declines in value against gold—the US gold reserves increase in value. isn’t this a wash?

"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."

-- "Gold and Economic Freedom", by Alan Greenspan (1987)

http://www.freerepublic.com/focus/news/2490376/posts?page=22#20

[trek]

"Deficit spending is simply a scheme for the confiscation of wealth."

This is true.

"Gold stands in the way of this insidious process."

This is manifestly false.

Why do you think the government was forced to abandon the gold standard? Answer: because they expanded the supply of money and credit beyond the point where the issued notes could be redeemed. And this happened under a gold standard.

You are pretty close, however. The real evil is fractional reserve banking where the government and its merry band of bankster thieves can issue credit in excess of savings. And in the context of a banking system with a 100% reserve requirement a gold standard can be valuable. But redeemable currency per se solves nothing. History proves this.

[penelopesire]

Wow..what happened to Greenspan over the years? Sounds like he had his head on his shoulders back then...now he seems like just another tool of the very statists he railed against in 1987. ???

[TruthConquers]

"The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This needs to be said again. This is the whole fulcrum of the current federal government, and has been for a VERY long time.

Death to fractional reserve banking.