Thursday, October 30, 2014

HOT Alan Greenspan Says BUY GOLD

Alan Greenspan: "Buy gold."

Michael Derby at WSJ reports:
The question of when officials should begin raising interest rates is “one of those questions I cannot answer,” Mr. Greenspan said.

He also said, “I don’t think it’s possible” for the Fed to end its easy-money policies in a trouble-free manner.

“We’ve never had any experience with anything like this, so I’m not going to sit here and tell you exactly how it’s going to come out,” Mr. Greenspan said. But he noted that markets often react to changes in central bank policy unpredictably and not entirely rationally. Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets, so there is no reason to suspect that the actual process of boosting rates would be any different, Mr. Greenspan said.

He said the Fed may not even have that much power over the timing of interest-rate increases. The problem as he sees it is an interest rate the Fed pays on the money banks park at the central bank, called reserves. Fed officials plan to use this tool as their primary lever for raising interest rates when the time comes. If bankers decide to put this money to work, creating inflation risks, the Fed may be forced to raise rates, even if the economy isn't ready for it, he warned.

“I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves,” Mr. Greenspan he said.

Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.
Greenspan has it correct, the reaction to the Federal Reserve low interest rate policy will not be controlled by the Fed. Markets will move on their own. It is not going to be pretty and with Greenspan advising buying gold, it is clear he knows that part of the market reaction is going to be soaring price inflation.

BTW: This is a very serious but subtle attack on both Ben Bernanke and Janet Yellen monetary policy.

If you are a former Fed chair and you are advising that gold be bought, you are not suggesting that monetary policy is being handled in a competent manner.

Overall. this is the most sound analysis I have seem from the former Fed chairman. Murray Rothbard was right, they only speak truth once they are out of power.

(ht  Nick Badalamenti)


  1. When (Date and time) did he make this comment about Gold?

    1. I see where you are going @ 1202 as I type this...

  2. Is a "competent monetary policy" even possible?

  3. Bernanke said, "Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna [Schwartz, Friedman's coauthor]: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

    I will go to my grave - and the day just started so, watch out - believing that Bernanke looked at the events of 2008 as a Test of Monetarism. The problem was, the Monetarist Solution of backing trucks filled with money to the back of the banks to stop Bank Runs was one given by Friedman in response to what had already happened.

    Bernanke injected his perceptions as to what WAS ABOUT to happen and made the Political Decision to forestall a Banking Crisis by preparing for a Bank Run which never happened. The answer always given to the Hyperinflationists was: "Where's the Hyperinflation?" There has not been Hyperinflation and the reason given by the Banksters is that the $$$ was held in Reserves.

    As Whitehead stated, however, "It's easier to smell the incense than to have the religious experience."

    Having removed Economic Decisions and replaced them with Political Ones, the FED has no idea how to get back to Market Decisions without greatly disturbing what has been suppressed for years. What was done may now be seen as not involving the Monetarist Doctrine but reorganizing the entire US (Possibly Western) Banking System.


  4. But, wait . . . didn't he say that the government can simply print all the money it wants to pay its bills?

  5. This man is a coward, a thief and a liar and has lost all credibility. He still owes his existence to the masters he served as FED Chair. If he is recommending gold it must be in their best interest that he do so. I would proceed very cautiously.

    1. I'm very nervous about this too. Doesn't make me want to go out and buy more gold...

  6. Come on. How could anyone NOT trust that face!