“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 holdings illegal, as was done in the case of gold…

…If everyone decided, for example, to convert all his bank deposits as silver or copper or any other good and declined to accept checks as payments for goods, bank deposits would lose their purchasing power and government-credited bank credit would be worthless as claims 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 understanding the statists’ antagonism toward the gold standard.” Alan Greenspan, “Gold and Economic Freedom”, Ayn Rand’s Objectivist Newsletter, 1966

“According to his own logic, Greenspan (as Fed Chairman) had simply become a statist.”, Ron Paul, “End the Fed”, 2009

“Prior to one of our biannual meetings with (Fed Chairman) Greenspan, we were given a photo opportunity. Since it was a scheduled event I brought with me my copy of the original faded green objectivist newspaper of 1966. During the short visit and picture taking, I showed him a copy of the letter and asked if he recalled  the newsletter, which he quickly acknowledged. Upon opening the small booklet to his “Gold and Economic Freedom” article, I asked if he would autograph the article for me, which he promptly did. As he was signing the article, I asked if he would like to put a disclaimer on it. Astoundingly, he answered that he had just recently reread it and wouldn’t change a word of it.”, former Congressman Ron Paul, “End the Fed”, 2009 

“We had views about inflation in the 1960s, and in fact, the desirability of a little inflation, which we no longer hold anymore, at least the vast majority no longer hold as being desirable…..So all I can say is that the long tentacles, you might say, of the Austrian school have reached far into the future from when most of them practiced and have had a profound and, in my judgment, probably irreversible effect on how most mainstream economists think in this country.”, Federal Reserve Chairman Alan Greenspan Responding to Congressman Ron Paul, June 25, 2000

“Greenspan’s claim, in answer to one of my questions, was that central bankers essentially had become smart enough to achieve all the benefits of the gold standard without its limitations. Of course, it’s the limitations that are so valuable, and the reason the gold standard is so important to a free society.”, Ron Paul, “End the Fed”, 2009

“Once you decide that a commodity standard such as the gold standard is, for whatever reasons, not acceptable in a society and you go to a fiat currency, then the question automatically, unless you have government endeavoring to determine the supply of the currency, it is very difficult to create what effectively the gold standard did. I think you will find, as I have indicated to you before, that most effective central banks in this fiat money period tend to be successful largely because we tend to replicate that which would probably have occurred under a commodity standard in general. I have stated in the past that I have always thought fiat currencies by their nature are inflationary…..And what I have begun to realize is that, because we tend to replicate a good deal of what a commodity standard would do, we are not getting the long-term inflationary consequences of fiat money. I will tell you, I am surprised by that fact. But it is, as best I can judge, a fact.”, Federal Reserve Chairman Alan Greenspan Responding to Congressman Ron Paul, July 21, 2004

“Congressman, as I have said to you before, the problem you are alluding to is the conversion of a commodity standard to fiat money. We have statutorily gone to a fiat money standard, and as a consequence of that it is inevitable that the authority, which is the producer of the money supply, will have inordinate power. And the power that we have is all granted by you. We don’t have any capability whatsoever to do anything without the agreement or even acquiescence of the Congress of the United States.”, Federal Reserve Chairman Alan Greenspan Responding to Congressman Ron Paul, February 11, 2004

“Well, as you say central banks own gold….or monetary authorities own gold. The United States is a large gold holder. And you have to ask yourself: Why do we hold gold? And the answer is essentially, implicitly, the one that you have raised….namely that, over the generations, when fiat monies arose and indeed, created the type of problems….which I think you correctly identify…of the 1970s, although the implication that it was some scheme or conspiracy gives it a much more conscious focus than actually, as I recall, it was occurring. It was more inadvertence that created the basic problem. But as I’ve testified here before to a similar question, central bankers began to realize in the late 1970s how deleterious a factor the inflation was. And, indeed, since the late 70s central bankers have generally behaved as though we were on the gold standard. And, indeed, the extent of liquidity contraction that has occurred as a consequence of the various different efforts on the part of the monetary authorities is a clear indication that we recognize that excess of credit of liquidity creates inflation which, in turn, undermines economic growth. Would there be any advantage, at this particular stage, in going back to the gold standard? And the answer is: I don’t think so, because we’re acting as though we were there. Would it have been a question at least open in 1971, as you put it? And the answer is yes. Remember, the gold price was $800 an ounce. We were dealing with extraordinary imbalances, interest rates were up sharply, the system looked to be highly unstable and we needed to do something, and we did something. Paul Volcker, as you may recall, in 1979 came into office and put a very severe clamp on the expansion of credit. And that led to a long sequence of events here, which we are benefiting from up to this date. So I think central banking, I believe, has learned the dangers of fiat money and I think as a consequence of that we’ve behaved as though there are, indeed, real reserves underneath this system.”, Federal Reserve Chairman Alan Greenspan Responding to Congressman Ron Paul, July 20, 2005

“So, it looks like it will take high consumer price and producer price inflation for Greenspan ever to give token reconsideration of gold….As for his claim that central bankers were behaving as if on the gold standard, the record of the 1990s indicates otherwise, and result is the catastrophe that began in 2008. The message Greenspan was delivering in 1966 was quite different from his message and policy as Federal Reserve Board Chairman.”, Ron Paul, “End the Fed”, 2009

“In a way, it’s pretty astounding. After inflating the currency endlessly for every correction and every political crisis during his tenure, he claimed that he recognized the danger of how excessive credit of liquidity creates inflation. Now in the middle of possibly the greatest correction of credit creation of all history, Greenspan remains in denial as to his most significant contribution to the crisis. I would say that he never came close to achieving what he claimed….that he could get paper to substitute for gold when managed by wise central bankers. History will prove that goal unachievable, and any sophistication in managing fiat currency may well delay corrections, but in doing so only allows a greater financial bubble to form. That’s what today’s crisis is all about.”, Ron Paul, “End the Fed”, 2009

 “Most of Greenspan’s (Congressional) testimony (on October 24, 2008) was designed to attempt to protect his reputation and to explain away his shortcomings as Federal Reserve Board chairman. His testimony was pathetic. He made the point about the computer programs that they were using to anticipate these problems were not well designed. The only reason there was an expansion of debt is there was excessive demand for our debt; it was not a consequence of Federal Reserve Board policy. And to climax his arguments, he said he did make a mistake, that indeed we did not have enough regulations on the market. In other words, create the conditions for malinvestment and compensate for them by having more government regulations.”, Ron Paul, “End the Fed”, 2009

“History will show that Greenspan, during his years as Fed chairman (1987-2006), planted all the seeds of the financial calamity that erupted in 2007 and 2008.”, Ron Paul, “End the Fed”, 2009

“For the same reason a disease cannot be cured by more of the germ that caused it, the inflation and debt accumulation of the Obama years will not inflate our way out of it. The depression will likely last and last. If the depression lasts a decade or more, its length cannot be blamed solely on Greenspan. That blame will be placed on the current Federal Reserve Board, Congress, the President, the Treasury, but above all on Keynesian economic policy, the same philosophy that gave us the Great Depression of the 1930s.”, Ron Paul, “End the Fed”, 2009

 “The economic downturn is the necessary correction of the artificial boom produced by the central bank’s easy credit and artificially low interest rates. The duration itself is a consequence of the interference with the liquidation of debt and malinvestment and adjustment in prices of labor, goods, and services. It’s too much to ask politicians or bureaucrats not to centrally plan the economy, especially when the market is struggling to rectify the mistakes that come as a consequence of the Federal Reserve Board policy.”, Ron Paul, “End the Fed”, 2009

Posted on April 21, 2015, in Postings. Bookmark the permalink. Leave a comment.

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