The issue is, was, and always will be, does it matter that fi-yacht is backed by nothing. Even Greenspan, the reigning fiat distribution prince, but hardly the king, admitted that fiat has a critical, inherent flaw, which if not as he put it, "managed" correctly, would indeed lead to a economic disaster, which he defined as [hyper]"inflation".
His little smirk comes from somebody who knows the rig well, and last week simply becomes another trophy on the Great Manger's mantle piece. However, I have to laugh, because this is all Greenspan has done, create hyper inflation. Look at the prices of things these days. Those prices are not the result of productivity gains, they are a result of monetary inflation, prompted by many factors, but surely a big one is the govt's capacity to create new debt, of which an obliging money cartel is more than happy to 'fund'.
The govt was going into contraction mode pre 9/11. They were lowering taxes, giving rebates, etc. No major source of new money was coming into the 'system'. This is probably one of the main reasons why the market was buckling and headed for a sustainable crash.
But then, by a coincidence we had 9/11/01 happen, which led to a massive round of fresh govt spending, and sure enough, we are back to budget deficits again, and voila, look at, for example, DOW. The evidence is crystal clear: unless people keep borrowing new money, unless we go deeper into debt, in this current economic paradigm, there is no prosperity. What this means is our prosperity is leased from the bank/govt, and it really is not our own. If the bank/govt ever loses its ability to keep the rig afloat, than the whole thing collapses in upon itself, which is exactly where this thing was headed on 9/10/01.
Of course, the picture has changed, temporarily. There has been a massive rig going on since 9/11/01, and we are still inside of that action. Personally, I find it sickening how low the boyz have stooped to keep the CON game alive. If 9/11/01 did not happen, instead of a smirk, Greenspan would have either been eating crow, or out of a job by now. 9/11/01 shows us all how aggressive the boyz are at keeping their game alive. They have a level of control over the world, its people, and their economies that is totaly unprecedented.
The current net effect is just more hyper bubble pumping. That leads to more reckless speculation in the stock market, more pressure to buy high priced real estate, continued decimation of saving's accounts, and generally high prices of stuff throughout the economy, which will force the game to come full circle. It was inflationary price pressure that broke the market in the first place. Now they are at it again.
It seems to me that most people, looking at recent housing statistics, simply lack the ability to resit the pressure to 'get in'. Or maybe life cannot be put on hold forever. With the 4th Q rally, there was an avalance of pent up housing purchases that could hold back and wait no longer. Greenspan and his buds are saying "good, they took the bait"
But what of the next time, and the next episode, when once again that bank/govt needs to create another massive batch of fiat to keep the game afloat, inflation and productivity be damned? Today it was 9/11/01. The next time, if the past (9.11.01) is any indication of the future, we'd have to expect something much worse.
This is what Greenspan refers to when he says things like "in recent years we have seen that the fiat racket has been managed well." Is this the sort of thing that is good for America? No way. We do not need their fiat racket, and all the horrible conspiracies that are played out to keep the game going. We do not need the govt to grow at will, and create and fund for itself wars in order to keep the current new world economic order, which rests exclusively on fiat fundsing, in tact.
What we need is an honest money supply that cannot easily be manipulated, and we need to get back to the business of smaller govt and greater liberty for all. The world will likely become a far more peaceful place, with happier, and more produtive people.
However, the grocery clerk at Ralph's doesn't understand this. So even though they would accept gold coins for payment, they'll just as easily keep on with the paper. It is sad that they know so little how much they are getting screwed by the govt and the banks. If they understood that, they would in no way accept fiat. But because the fiat game is so aggressively pursued and defended by those who control it and benefit from it, the clerk at Ralph's is not likely in his lifetime to ever understand the full extent of how his future is being undermined by the banks and the govt, using their best weapon against clerks at Ralphs everywhere -- fi-yacht 'money'.