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. Alan Greenspan, Gold and Economic Freedom, 1967
Back in August, we wrote a piece called The Maestro and Goldabout Alan Greenspan, the architect of the modern fiat economy, the tech bubble, the housing bubble, and the most recent Financial Crisis.
"Back when Alan Greenspan wrote those words, he was a 41 year-old self-proclaimed Conservative Libertarian with free-market principles and a precocious grasp of market data. It was 20 years before he would become the Chairman of the Fed, and his association with Ayn Rand had solidified his subscription to the virtues of the gold standard and capitalistic values."
He hadnt yet become the high priest of fiat currency, and he was still a champion of gold as protecting the rights and property of the people. But in the following decades, Greenspan embraced fiat currency as the United States economy lurched from bubble to crash and back again.
While a lot of blame is (reasonably) placed on Ben Bernanke, Greenspan was at the helm of the Fed until early 2006by that time, the housing bubble was in full swing. In The Maestro and Gold, we speculated that Greenspan had come full circle to once again embracing the power of gold based on his advice to hedge fund Paulson & Co to place enormous bets on gold.
Today on Fox Business News, Greenspan came out with a stunning admission that gold was a necessary mechanism to limit governments.
We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggests that inflation will take hold with very deleterious effects on economic activity.
While Greenspan has been largely discredited, this confirmation is just another sign that fiat currencies are destined to end.
For those readers who have never read Gold and Economic Freedom, you should do so. Alan Greenspan, unlike Ben Bernanke, could actually write in plain. (1.21.2011) http://wealthcycles.com/blog/2011/01/21/greenspan-questions-the-need-of-the-fed
"To Achieve World
Government it is necessary to remove from the minds of men their individualism,
their loyalty to family traditions and national identification" Brock Chisholm - Director of the World Health Organization
"A society whose citizens refuse to see and investigate the facts, who refuse to believe that their government and their media will routinely lie to them and fabricate a reality contrary to verifiable facts, is a society that chooses and deserves the Police State Dictatorship it's going to get." Ian Williams Goddard
The fact is that "political correctness" is all about creating uniformity. Individualism is one of the biggest obstacles in the way of the New World Order. They want a public that is predictable and conditioned to do as it's told without asking questions.
"The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first." Thomas Jefferson