Posted on 10/07/2014 6:53:17 AM PDT by SeekAndFind
Former Federal Reserve chair Alan Greenspan published a mighty interesting article in Foreign Affairs last week. He said that China could be thinking of increasing its gold stocks in a big way. Perhaps, Greenspan implied, the Chinese even have a thought of making their currency, the RMB, convertible in gold.
The episodic article went on to discuss how strange it is that the big fiat-country countries, from the United States on, maintain their multi-hundred-billion-dollar gold stocks. They never want to sell, for all the trashing of gold-as-money from the wonks, economists, and serious statesmen.
When gold prices are low (which happens when countries conduct monetary policy well), there is no profit in selling. When prices are high, there is such skepticism about the conduct of monetary policy that countries cannot think of getting rid of the one monetary asset which everybody still believes in. So tons of gold sit there forever, parked in government vaults.
Greenspan recounted a memory of the Ford Administration, when Treasury secretary William E. Simon tried to get the president to unload the U.S. gold stock. The Fed chair, Arthur Burns, supervising the only serious peacetime inflation in the nation’s history, was deadly against. He knew that all confidence in the dollar would be gone if the U.S. were bereft of its gold.
Greenspan (who was chair of the Council of Economic Advisors at the time) suggested in his article that Milton Friedman’s argument that “gold no longer served any useful monetary purpose” had motivated Simon. I wonder. Friedman never quite made that argument, and Simon had been the one who pushed Ford to sign, in 1974, the Rep. Phil Crane-inspired order permitting Americans to own gold once again. Owning gold valued at more than $100 had been outlawed since 1933,
(Excerpt) Read more at forbes.com ...
Therein lies an interesting question, at least for the US. Have they maintained their stocks? Are we being told the truth on that inventory? There have been questions.
Other that that, it's always wise to listen to him. Gee, I guess I'll cash in all my savings and buy gold bullion.
Lol.
I thought he was bald..........
Greenspan was a gold bug before he went to the Fed. There, he was enamoured of fiat. Now that he’s out, he’s a gold bug again.
Being in government seems to infect people with some sort of mind disease.
Only a few ever are immune to it.
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