Alan Greenspan: Ron Paul Was Right About The Gold Standard

Alan Greenspan: Ron Paul Was Right About The Gold Standard:

When I was Chair of the Federal Reserve I used to testify before US Congressman Ron Paul… we had some interesting discussions… We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.


And he said many years ago:

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … 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 in understanding the statists’ antagonism toward the gold standard.”

– Alan Greenspan

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A Funny Thing Happened To Oil Prices When Nixon Killed The Gold Standard

Israeli PM Golda Meir meets U.S. President Richard Nixon in Washington, March 1, 1973

A Funny Thing Happened To Oil Prices When Nixon Killed The Gold Standard (ZeroHedge, Dec 20, 2014):

For the past 150 years, crude oil prices have varied between around $10 per barrel and around $120 per barrel. For many decades, oil prices were relatively “stable” but a funny thing happened in the early 70s and everything changed – whether coincidental or causative the linkages between the oil crisis and Nixon’s Gold-Standard-busting of Bretton Woods are clear in the chart below. Goldman expects continued high oil price volatility with risks skewed to the downside as the market searches for a new equilibrium… and a period of macroeconomic adjustment to structurally lower oil prices. Is oil adjusting to a new ‘gold-standard-esque’ normal?

The Stability Of The Gold Standard Era Vs The Centrally-Banked Fiat Capital Era

So Much For The Stability Of The Centrally-Banked “Fiat” Era (ZeroHedge, April 1, 2013):

According to some economist PhDs, the end of the gold standard era marked by the arrival of the Federal Reserve one century ago ushered in the era of stability, prosperity and virtually unlimited growth (just ignore the two world wars and millions of casualties immediately following). While that is an amusing way of describing a financial system that is now daily on the brink of a financial apocalypse courtesy of a few good central banks propping up a $1 quadrillion house of derivatives cards, whose collapse would mean an immediate “game over”, and where (rapidly evaporating) confidence in a failing status quo, must be preserved at all costs, the question of post-Fed induced stability is an interesting one, especially when measured in terms of intangible value (in this case the most basic of indicators – the Dow Jones), compared to thousands of years of a real tangible, store of wealth: gold. In the chart below, courtesy of Cambridge House, we ask readers: in which period was there a more stable relationship between tangible and intangible values, and a less exuberant irrationality vis-a-vis that which is purely based on confidence, if not so much reality.

A second logical follow up question is: where is this ratio of intangible to tangible value going next? The chart below attempts to provide some log-based perspective on precisely this.

Is the Gold Price Dependent on China?

Is the Gold Price Dependent on China? (Azizonomics, Jan 19, 2013):

China now buys more gold than the Western world:

Does that mean, as some commentators are suggesting, that future price growth for the gold price depends on China? That if the Chinese economy weakens and has a hard landing or a recession that gold will fall steeply?

There’s no doubt that the run-up that gold has experienced in recent years is associated with the rise in demand for gold from emerging markets and their central banks. And indeed, the BRIC central banks have been quite transparent about their gold acquisition and the reasons for it.

Zhang Jianhua of the People’s Bank of China said:

No asset is safe now. The only choice to hedge risks is to hold hard currency — gold.

Indeed, this trend recently led the Telegraph’s Ambrose Evans-Pritchard to declare that the world was on the road to “a new gold standard” — a tripartite reserve currency system of gold, dollars and euros:

Read moreIs the Gold Price Dependent on China?

Republicans Consider Returning To Gold Standard: Real Or Red Herring?

Republicans Consider Returning To Gold Standard: Real Or Red Herring? (ZeroHedge, Aug 24, 2012):

Stranger than fiction perhaps but the FT is reporting that the gold standard has returned to mainstream US politics for the first time in 30 years with a ‘gold commission’ set to become part of official Republican party policy. While this could simply be a reach for as many Ron Paul marginal voters as possible (with the view that the GOP would never really go for it); it appears drafts of the party platform from the forthcoming rain-soaked convention call for an audit of the Fed and a commission to look at restoring the link between the dollar and gold. The FT, citing a spokesperson, adds that “There is a growing recognition within the Republican party and in America more generally that we’re not going to be able to print our way to prosperity,” but “We’re not going to go from a standing start to the gold standard,” although it would provide a chance to educate politicians and the public about the merits of a return to gold. Interestingly, the Republican platform in 1980 referred to “restoration of a dependable monetary standard”, while the 1984 platform said that “the gold standard may be a useful mechanism.”
The FT does its best to placate the hysteria and walk it back with:

Read moreRepublicans Consider Returning To Gold Standard: Real Or Red Herring?

Steve Forbes: How To Bring Back America

Steve Forbes: How To Bring Back America (ZeroHedge, July 7, 2012):

Steve Forbes has a message for a nation dominated by increasingly short-term decisions made on Wall Street and in Washington D.C., and by ever greater economic, financial and currency instability.  As long as America continues moving away from sound money; away from sound financial and economic policies; and, ultimately, away from freedom, its future grows more dim. The dot-com and housing bubbles followed by the 2008 financial crisis and the most severe economic decline since the Great Depression serve as powerful lessons.  A future of bigger government, higher taxes, more burdensome regulations, less consumer choice and more unrealistic government promises requires more and more Federal Reserve play money.

Steve Forbes has a quintessentially American policy prescription rooted in American history.  The answer to America’s economic problems is—and has always been—new wealth creation.  New wealth creation doesn’t come from the government or from the Federal Reserve’s printing press.  New wealth creation is what happens naturally with stable money based on the gold standard, lower taxes on individuals, a simplified tax code, reduced bureaucracy and free markets.

Interview: Steve Forbes: How To Bring Back America

Read moreSteve Forbes: How To Bring Back America

Example Of Non-Gold Standard ‘Price Stability’: A 1 In 1,516,122,879,893,320,000,000,000,000,000 Event!

An Example Of Non-Gold Standard “Price Stability”: A 1 In 1,516,122,879,893,320,000,000,000,000,000 Event (ZeroHedge, Aug, 16, 2011):

Earlier today, at least one economist was ridiculing the gold standard because supposedly while under one, there was “price instability”, despite empirical proof by George Selgin that the Fed’s mandate of ‘price stability’ has been a disastrous exercise in complete futility.

For those who have a shorter attention span and can not be bothered with multi-page, non-bulletized presentations, here is an example of your precious centrally planned price stability:

as Sean Corrigan demonstrates, the swing back and forth in the CHF trade weighted index on SNB (non)intervention in one short week is a 11.5 sigma event, or a 1 in 1,516,122,879,893,320,000,000,000,000,000 event, which without central planning price stability intervention would occur roughly once every several trillion qunitillion years.

And the kicker:

a quick look around today’s markets is chock full of such examples. But yes, aside from the facts, the gold standard is a “joke.”

In the meantime, anyone who took said economist’s advice and went long spam and short gold, is broke about 10 times over in the past two years…

A Lesson From The Gold Standard (Invented By Sir Isaac Newton Ca. 1700)

Physical gold (and silver) is real money …

James Turk on the US Dollar, the Euro, Hyperinflation, Gold And Silver (Video)

… everything else is an illusion.

A lesson from the Gold Standard (Gold Money, June 19, 2011):

Sir Isaac Newton invented the Gold Standard circa 1700. The Gold Standard undoubtedly ranks as one of his greatest achievements given that it became the backbone of the British Empire.

The pound was “as good as gold”, as the saying went, and the pound banknote was accepted around the globe as a substitute for gold itself – but not always. The paper-pound was willingly accepted until there was a banking or financial crisis, which meant the quality of the currency and the reliability of banks became questioned.

Read moreA Lesson From The Gold Standard (Invented By Sir Isaac Newton Ca. 1700)

Glenn Beck: Economic Apocalypse

Glenn Beck on the coming devaluation of the dollar.

“We have pumped all of this money in (see chart) and devalued our money.”

“How is it not going to be worthless?”

“This has never ever been done by anybody ever before.”

“This is real trouble, not in a thousand years, perhaps the next year.”

Source: YouTube