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.He, of course, abandoned this view, at least publicly, as chairman of the Federal Reserve, and became the money printing puppeteer that through the Federal Reserve pumped trillions of dollars into the banking system. These actions ultimately resulted in the collapse of the housing market, a financial crisis and an economic crisis so severe that it must be compared to the Great Depression.
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.
In her autobiography, Audition, Barbara Walters indicates that while she dated Greenspan she feuded with him over his agreeing to become Federal Reserve chairman. She wrote:
How Alan Greenspan, a man who believed in the philosophy of little government interference and few rules or regulations, could end up becoming chairman of the greatest regulatory agency in the country is beyond me. It was a big issue when Alan was first appointed...With the power days of Washington D.C. behind him, and now living in the money days, he appears to be returning to a fondness for gold. Since leaving the Federal Reserve, Greenspan has been cashing in by providing consulting services to hedge funds and other such organizations, who pay for one thing and one thing only: advice that will make them money. Where does Greenspan think hedge fund players can make money in these troubled times? Why with gold, of course!
The multi-billion dollar hedge fund run by John Paulson has a huge position in gold. Zero Hedge reprints a portion of a Paulson letter sent to investors. In that letter, Paulson explains who is advising them to buy so much gold :
Lastly, and perhaps most important, from a monetary policy perspective in developing an ability to forecast the timing and future price of gold we believe we have an unparalleled team. Former Federal Reserve Chairman Alan Greenspan has been extremely helpful to us in understanding the relationship between the monetary base, the money supply, inflation and gold prices.Bottom line: The hint from Barbara Walters that Greenspan was simply a sell out to gain power when he took his Federal Reserve position, gains new credence. Now that he makes his money by speaking truth, he is dissing the Fed and telling his paymasters to loaded up on gold.