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Fiat money has no place to go but gold: Greenspan

yellow brick road

“[Gold]is the canary in the coal mine. It signals problems with respect to currency markets.” — Greenspan

According to the New York Sun, only days after the former Federal Reserve chairman Alan Greenspan warned that “fiat money has no place to go but gold,” the dollar has collapsed to a new low. The remarks of the former Fed Chairman were made a week ago at the Council on Foreign Relations, causing a flurry of excitement on the Internet. The dollar shed value, dropping to a record low yesterday, within minutes of the Federal Reserve declaring that it was, as characterized by Reuters, “ready to provide more support for the economy and expressing concerns about low inflation.”

Forewarning hammered for years

Serious financial agencies (such as the Fed and leading Canadian Banks) havewarned of a double dip recession is near and/or deflation. These are not gentle suggestions my friends, these are hammer blows to the alarm bell. When (not if) these conditions arrive it’s going to be the rich (not you and I) who will be offered shelter from the storm.

The inflationary spiral that started in the early 60’s has peaked. Nobody can tell you how steep or long the deflationary run will be, but these agencies are telling you it is about to start. To survive what’s coming you need to take action now.

  • If you’ve got non-cash assets…turn ’em into cash ASAP.
  • If you’ve got debt…start defaulting, hide your cash savings and prepare to declare bankruptcy. Deflation is going to gut your cash flow and income but it won’t reduce you debt load by so much as a nickel.
  • If you’ve got cash…then my friend you are king. Hang on to it real tight and wait. About this time in 2011 you should start seeing deeply, deeply discounted materials (like houses for 1/3 of current values) and assets (like blue chip stocks at half today’s price).
  • Get liquid, hide/hold your cash and harvest a bumper crop of values in about a years time.

Greenspan’s Warning About Gold Echoes After Fed Speaks by NY Sun

It’s amazing to us that this doesn’t seem to be raising an alarm in either the halls of Congress, the administration, or the newsrooms. Kitco News, which is published by the gold dealer, reported the reaction this way: “Around 3:30 p.m. EDT (1930 GMT), spot gold was up $6.90 to $1,285.40 an ounce, compared to $1,272 about 10 minutes ahead of the Fed statement. December gold on the Comex division of the New York Mercantile Exchange was $6.90 higher at $1,287.70, compared to $1,273.30 ahead of time. In after-hours trading following the Fed statement, the December futures went on to a high of $1,290.40; that is a fresh record for a most-active Comex contract.”

Regular readers of these columns know that we prefer not to speak of the “price of gold” but rather of the “value of the dollar.” Kitco’s reporter quoted the managing director of Trend/Max Futures, Zachary Oxman, as saying the Fed “all but confirmed” quantitative easing and predicting that the value of the dollar would fall below a 1,300th of an ounce of gold by the end of this week and to between a 1,400th of an ounce and a 1,500th of an ounce of gold by the end of the year. That would mean that the dollar would have dropped from a 271st of an ounce on January 1, 2001.

greenspan as a lizard

Greenspan the traitor

It’s comical all of this supposed financial advice comes from Alan Greenspan, former destroyer of the American economy, as the gold price reaches record highs amid his calls that “gold is money.” It would seem he speaks with one tongue on one end of his mouth, and another tongue on the other side much like a lizard would do.

Greenspan: Fiscal Stimulus Worked Far Less Than Expected by Infowars Ireland

The former head of the Federal Reserve said fiscal stimulus efforts have fallen far short of expectations, and the government now needs to get out of the way and allow businesses and markets to power the recovery.

“We have to find a way to simmer down the extent of activism that is going on” with government stimulus spending “and allow the economy to heal” itself, former Fed Chairman Alan Greenspan told a gathering held at the Council on Foreign Relations in New York on Wednesday.

At this point, “we’d probably be better off doing less than more” because “you’d be far better off to allow the normal market forces to operate here,” Greenspan said. That’s largely because stimulus spending is not proving as effective as many had hoped. “To the extent the evidence suggests very large deficits concurrently crowd out capital investment, there is a debit to the stimulus program that is somewhere between a third and a half of what the gross stimulus is,” he said.

Greenspan was Fed chairman from 1987 to 2006, and was succeeded by current central bank chief Ben Bernanke. Greenspan’s tenure at the Fed was defined by his opposition to government regulation and his confidence that markets would discipline themselves.

To many, the financial crisis was largely born of that ideology, and to some degree, Greenspan has himself said he overestimated the market’s willingness to understand and price for risk. Greenspan has also been widely accused of running an overly easy monetary policy during the early years of the last decade, in turn providing the fuel that powered the housing bubble, the rupturing of which drove the worst recession in generations

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