With Gold reaching new heights in dollar terms, I think this is an appropriate time to post an article on the subject circa 1967 by none other than the famed former Chairman of the Federal Reserve Alan Greenspan. In this article Greenspan, a former Goldbug, waxes eloquent on the role of Gold in our society, although it is debatable whether he can be classified as a "former" Goldbug. I, for one, think he's still a Goldbug. This is what he said in a recent speech at an investment conference in New York -

   "What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment".

and

   Rising prices of precious metals and other commodities are "an indication of a very early stage of an endeavor to move away from paper currencies".

Questions have been raised by some commenters on ZH recently whether Greenspan did what he did on purpose. Reading the article below and considering the fact that he is a devotee of Ayn Rand (who by the way was at his side when he was sworn in as chairman of the Council of Economic Advisers in 1974), it's pretty hard to argue that Greenspan did not know what he was doing. Of course, some might say what a horrible way to bring about change but the fact remains that Greenspan did not do anything that would not have happened otherwise - he just accelerated the process by giving the corrupt bankers (who control everything, including the Fed) enough rope to hang themselves. Also, in my humble opinion, human beings do not change until pushed to desperation. The beauty of this is that the people are not only becoming more aware about our financial system and heretofore obscure subjects such as monetary policy but are themselves demanding change - things like abolition of the fed, return to sound money, etc. Do you think any of this would have happened if everyone was fat and happy using the corrupt Fed-controlled fiat money system? I think not. This is a more sustainable way of changing things - i.e. from the grassroots level - as opposed to somebody at the top dictating what needs to be done, which almost always ends in failure. Indeed, the best protection against criminal organizations such as the Federal Reserve taking over our society is vigilant and informed citizens. Read this and figure out for yourselves whether this is someone who hates Gold or does not understand it. Greenspan might indeed be John Galt - the man who stopped the motor of the world.

From the editor's preface to a re-publication in Gilded Opinion of Alan Greenspan's essay, Gold and Economic Freedom:

[Editor's note - It may surprise more than a few gold devotees to learn they have an ideological friend in none other than Federal Reserve Board chairman Alan Greenspan. Starting in the 1950s, in fact, Greenspan was a stalwart member of Ayn Rand's intellectual inner circle. A self-designated "objectivist", Rand preached a strongly libertarian view, applying it to politics and economics, as well as to religion and popular culture. Under her influence, Greenspan wrote for the first issue of what was to become the widely-circulated Objectivist Newsletter. When Gerald Ford appointed him to the Council of Economic Advisors, Greenspan invited Rand to his swearing-in ceremony. He even attended her funeral in 1982.

In 1967, Rand published her non-fiction book, Capitalism, the Unknown Ideal. In it, she included Gold and Economic Freedom, the essay by Alan Greenspan which appears below. Drawing heavily from Murray Rothbard's much longer The Mystery of Banking, Greenspan argues persuasively in favor of a gold standard and against the concept of a central bank.

Can this be the same Alan Greenspan who today chairs the most important central bank of them all? Again, you might be surprised. R.W. Bradford writes in Liberty magazine that, as Fed chairman, "Greenspan (once) recommended to a Senate committee that all economic regulations should have fixed lifespans. Senator Paul Sarbanes (D-Md.) accused him of 'playing with fire, or indeed throwing gasoline on the fire,' and asked him whether he favored a similar provision in the Fed's authorization. Greenspan coolly answered that he did. Do you actually mean, demanded the senator, that the Fed 'should cease to function unless affirmatively continued?' 'That is correct, sir,' Greenspan responded."

Bradford continues, "The Senator could scarcely believe his ears. 'Now my next question is, is it your intention that the report of this hearing should be that Greenspan recommends a return to the gold standard?' Greenspan responded, 'I've been recommending that for years, there's nothing new about that. It would probably mean there is only one vote in the Federal Open Market Committee for that, but it is mine.'" -- Editor, The Gilded Opinion ]

Many on Zero Hedge, Gordon Gecko and commentators, appear to believe a return to a gold standard is what is needed.  Regardless, this puts Greenspan's actions and beliefs in an interesting context. It would appear that he believed that the very existence of the organization he led for decades was the result of bad policy. One does not have to be a goldbug or advocate a return to the gold standard to agree with that.

See also  Greenspan Shrugged by MICHAEL KINSLEY in the NYT Sunday Book Review

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."