Alan Greenspan Entertains Metal Standard, Again
Commodities / Gold and Silver 2011 Jan 28, 2011 - 02:40 AM GMTBy: Dr_Jeff_Lewis
Few casual observers of the world of international finance would see Alan Greenspan as an advocate for sound money. After all, he led the charge behind one of the largest financial bubbles in world history as chairman of the Federal Reserve.
That doesn’t mean, though, that a bad apple is wholly bad. In fact, it was 45 years ago in 1966 when Alan Greenspan wrote in his paper, “Gold and Economic Freedom,” that support for fiat currencies came only from “welfare statists” who were interested in deficit spending, not economic stability. Those words, which have been quoted many times over the years, haven’t been matched in their ferity, especially not from a central banker!
However, Greenspan’s famous words were hidden until recently. In an interview with Fox Business channel, he admitted support for a gold standard, or some other form of limit on the amount of currency that could be produced. Greenspan even went so far as to tell the interviewer that he, in fact, believed the United States was prosperous from 1870 to 1914, a period in which there were many economic cycles, but few as prolonged as recessions in the post-gold era of monetary policy.
Hop on the Bandwagon
Several noteworthy people from the world of finance have hopped on board the idea of a gold standard, which is, at least at this time, a little concerning. As many hard money advocates know, the future gold standard may be as cooked as the COMEX markets themselves, with inflated reserves used to back the value of the greenback.
Whether or not an official gold and silver standard is coming down the pipeline, I suspect, as do many others, that the price of gold and silver will only be buffered by new gold and silver standard converts. Remember the press explosion that surrounded Robert Zoellick when he, as the President of the World Bank, called for a second glance at gold as a measurement of inflation.
Since that high profile story, Zoellick denounced the gold standard in an almost 180-degree turn from his initial position, perhaps likely the result of his handlers—those who actually control the international banking system—telling him what he supported.
Regardless, the discussion does bring some opportunity for growing wealth. A return to a 15:1 bimetal arrangement of gold and silver could bring a market value for gold extending into the tens of thousands, while silver would rise (proportionally) much higher, given the rarity and the fact that most silver mined, unlike gold, has been consumed.
Getting Positioned
Of course, the best gold and silver standard is still that which can be held in the hand. After a brief consolidation of prices in January on Wall Street’s reallocation of funds, there exists ample buying opportunities through the spring, normally the weakest period in the commodity markets.
Summer then brings Indian festivals and renewed demand in Asia, whereas the Western markets will re-up on their positions after the realization that the economic fundamentals have not changed, and they will not change, until the gold and silver standard comes back to life. Of course, talking about a gold standard is part of the battle, but actually doing it, well, that’s the other 99%.
By Dr. Jeff Lewis
Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com
Copyright © 2011 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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