Monday, January 24, 2011

Was Alan Greenspan Advocating For A Gold Standard?

Former Fed Chairman Alan Greenspan, who was in office during some of the greatest periods of economic prosperity the country has ever seen, is also credited by many experts for creating the foundation for the latest economic crisis. Whether you are pro Greenspan or not, you will likely find the following video clip interesting. Was Greenspan really advocating for a gold standard? For the full scoop, continue reading the blog post below from Tim Iacono over at The Mess That Greenspan Made.

This late-2007 video in which former Fed Chairman Alan Greenspan comments on the history of fiat money and a new gold standard has been making the rounds in recent days. It was noted in this item at the old blog more than three years ago and, for reasons that should be obvious to readers here, it makes even more sense today.

Favorite line:

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 suggest that inflation will take hold with very deleterious effects on economic activity … There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard.

For a good chuckle, also see the chart in Golden Ben Bernanke from around that same time.

This post was republished with permission from The Mess That Greenspan Made.

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