Alan Greenspan: Hedge Against the Federal Reserve and Buy Gold

[Lamarr]

Source

The curious Alan Greenspan, who is now 84 years old, appears to have come full circle and returned to the ideas of his earlier years. In 1966, at the age of 40, he wrote a paper calling for the United States to return to a full gold standard and warned of the dangers of not doing so:

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.

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.

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 load up on gold.

 

[muckraker10021]

Don’t believe any cover story bullshit hype about Greenspan; he was never a man of integrity. His entire career consisted of being just another Machiavellian manipulator serving the interest of the corporate elites to the detriment of 99% of all other Americans.

Play the video below of now US senator Bernie Sanders confronting former Federal Reserve Chairman Alan Greenspan’s bold face lies as Greenspan was testifying in front of a congressional committee.

[FLASH]http://www.youtube.com/v/rPh-qGcYruw&hl=en_GB&fs=1[/FLASH]

Keep in mind this exchange occurred several years ago before the economy cratered & imploded in 2008. Everything senator Bernie Sanders said was 100% on point. Listen carefully to Greenspan’s cynical response to the litany of facts senator Sanders hits him with. Greenspan cannot counter what senator Sanders says.
Greenspan says:<blockquote>
“Major focus of monetary policy is to create an environment in this country which enables capital investment and innovation to advance, we are at the cutting edge of technologies in the world, we are doing an extraordinary job over the years and people flock to the United States, our immigration rates are very high and why, because they think this is a wonderful country to come to.”</blockquote>
Let me interpret Greenspan’s bull speak. What he essentially has said is that the US economy is being run for the benefit of big corporations not working class US citizens.

He said <i>”major focus of monetary policy is to create an environment in this country which enables capital investment and innovation to advance </i> That means outsourcing of jobs to China, India, Indonesia, Singapore etc. That means increased productivity.

When you hear the business report on the news talk about increased productivity and celebrate any increase, what does that really mean? It means that corporations are making more money by squeezing more work out of their remaining workers - (more hours worked, less vacation time, decrease in employee benefits etc.) - as they shed thousands of workers.

His comment about flocking immigrants is even more insulting to American workers. Flocking immigrants depress wages for US workers many who have spent $100,000 or more getting the college education they were told would solidify their path to the middle class & higher.

As it is said , a picture is worth a thousand words; The graph below throws into stark relief what the Greenspan policies have meant for working class US citizens.

<SPAN style="background-color:yellow">
There has been ZERO net job creation in the USA since December 1999. </span>

Who controlled the macro economic policy at the Federal Reserve during the last decade?? Alan Greenspan
READ:http://www.washingtonpost.com/wp-dyn/content/article/2010/01/01/AR2010010101196.html


<hr noshade color="#0000FF" size="8"></hr>

When Ronald Reagan became President in 1981, he abandoned the traditional economic policies, under which the United States had operated for the previous 40 years, and launched the nation in a dangerous new direction. As Newsweek magazine put it in its March 2, 1981 issue, “Reagan thus gambled the future — his own, his party’s, and in some measure the nation’s—on a perilous and largely untested new course called supply-side economics.”

Essentially, Reagan switched the federal government from what he critically called, a “tax and spend” policy, to a “borrow and spend” policy, where the government continued its heavy spending, but used borrowed money instead of tax revenue to pay the bills. The results were catastrophic. Although it had taken the United States more than 200 years to accumulate the first $1 trillion of national debt, it took only five years under Reagan to add the second one trillion dollars to the debt. By the end of the 12 years of the Reagan-Bush administrations, the national debt had quadrupled to $4 trillion!
<SPAN STYLE="background-color:YELLOW"><b>
Ronald Reagan and Alan Greenspan pulled off one of the greatest frauds ever perpetrated against the American people in the history of this great nation, and the underlying scam is still alive and well, more than a quarter century later. It represents the very foundation upon which the economic malpractice that led the nation to the great economic collapse of 2008 was built.</b></span> Ronald Reagan was a cunning politician, but he didn’t know much about economics. Alan Greenspan was an economist, who had no reluctance to work with a politician on a plan that would further the cause of the right-wing goals that both he and President Reagan shared.

Both Reagan and Greenspan saw big government as an evil, and they saw big business as a virtue. They both had despised the progressive policies of Roosevelt, Kennedy and Johnson, and they wanted to turn back the pages of time. They came up with the perfect strategy for the redistribution of income and wealth from the working class to the rich. Since we don’t know the nature of the private conversations that took place between Reagan and Greenspan, as well as between their aides, we cannot be sure whether the events that would follow over the next three decades were specifically planned by Reagan and Greenspan, or whether they were just the natural result of the actions the two men played such a big role in. Either way, both Reagan and Greenspan are revered by most conservatives and hated by most liberals.

If Reagan had campaigned for the presidency by promising big tax cuts for the rich and pledging to make up for the lost revenue by imposing substantial tax increases on the working class, he would probably not have been elected. But that is exactly what Reagan did, with the help of Alan Greenspan. Consider the following sequence of events:

1) President Reagan appointed Greenspan as chairman of the 1982 National Commission on Social Security Reform (aka The Greenspan Commission)

2) The Greenspan Commission recommended a major payroll tax hike to generate Social Security surpluses for the next 30 years, in order to build up a large reserve in the trust fund that could be drawn down during the years after Social Security began running deficits.

3) The 1983 Social Security amendments enacted hefty increases in the payroll tax in order to generate large future surpluses.

4) As soon as the first surpluses began to role in, in 1985, the money was put into the general revenue fund and spent on other government programs. None of the surplus was saved or invested in anything. The surplus Social Security revenue, that was paid by working Americans, was used to replace the lost revenue from Reagan’s big income tax cuts that went primarily to the rich.

5) In 1987, President Reagan nominated Greenspan as the successor to Paul Volker as chairman of the Federal Reserve Board. Greenspan continued as Fed Chairman until January 31, 2006. (One can only speculate on whether the coveted Fed Chairmanship represented, at least in part, a payback for Greenspan’s role in initiating the Social Security surplus revenue.)

6) In 1990, Senator Daniel Patrick Moynihan of New York, a member of the Greenspan Commission, and one of the strongest advocates the the 1983 legislation, became outraged when he learned that first Reagan, and then President George H.W. Bush used the surplus Social Security revenue to pay for other government programs instead of saving and investing it for the baby boomers. Moynihan locked horns with President Bush and proposed repealing the 1983 payroll tax hike. Moynihan’s view was that if the government could not keep its hands out of the Social Security cookie jar, the cookie jar should be emptied, so there would be no surplus Social Security revenue for the government to loot. President Bush would have no part of repealing the payroll tax hike. The “read-my-lips-no-new-taxes” president was not about to give up his huge slush fund.

by Allen W. Smith, Ph.D. - http://www.thebiglie.net/

 

[Chitownheadbusa]

^^^^profound post on the subject at hand.

And to think the Dems & Prez. Obama are helping to prolong most of the ill's that you posted.