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Banned
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Oh....yeah....Greenspan "is a hack", and he merits watching....closely:
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Whatever Greenspan decides, two things are certain: He will carry his Fed
colleagues with him, and the financial markets will respond.
He is a peculiar wizard, at once secretive and highly social. By night, he
shows up at one Washington social whoop-de-do after
another—everything from Jack Kent Cooke's box at RFK Stadium to the
Gridiron Club dinner. And on April 6, this quiet, private man is marrying
NBC-TV's high-profile reporter Andrea Mitchell, 50, who has been his
companion for more than 12 years. <a href="http://www.udel.edu/Economics/massey/gsprofile.html">http://www.udel.edu/Economics/massey/gsprofile.html</a>
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For those who have me pegged as a rabid, liberal partisan scoundrel, and worse, I'll disclose that one of my long time "heroes" is 14th Texas Congressional District's Congressman Ron Paul MD, a man who never compromises his principles. Read the following two articles, and follow
the link to the third article regularly, for the entertainment and awareness
value combined, and you will have no questionn as to whether Greenspan "is a hack" ,and you will become concerned, to the point of being as afraid as I have become, for the future of our currency, and for our country..............
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<a href="http://www.smartmoney.com/aheadofthecurve/index.cfm?story=20020301">http://www.smartmoney.com/aheadofthecurve/index.cfm?story=20020301</a>
Ahead of the Curve
The Greenspan Gadfly
By Donald Luskin Published: March 1, 2002
THERE IT WAS, on live TV, in the Q&A session following Alan Greenspan's testimony before the House Financial Services Committee this week. Taking his turn with all the other committee members posing their loaded questions to score points with the voters back home about unemployment benefits, trade tariffs, tax cuts or whatever their pet issues might be, Rep. Ron Paul, a former doctor from the 14th district in Texas who brags on his Web site of having delivered over 4,000 babies, asked Chairman Greenspan point-blank if he thinks the Federal Reserve operates just like Enron (ENRNQ).
It was like a scene from "Mr. Smith Goes to Washington." Visualize Jimmy Stewart as Jefferson Smith here — a little nervous, perhaps a touch mad — but deep-down aw shucks sincere. Ron Paul, a Republican, looked the Master of the Universe in the eyes and said, "...we have nearly a $6 trillion debt.... Now the Federal Reserve comes in and they buy that debt in order to maintain the interest rate that they think is the right interest rate, and they take that and they use it as an asset. You put it in the bank, you call this debt that we have created an asset, and you use it as collateral for our Federal Reserve notes. So that's a pretty good scheme. And I think in moral terms, as well as in economic terms, it's very similar to how Enron operates."
A pause. The camera cut to Greenspan, scowling, almost a smirk, with his eyes rolled up looking at the ceiling, as though he were just waiting to see how this utterly bizarre monologue is going to resolve into a question he will actually have to answer, hoping maybe Paul's time will run out.
Paul went on for a while longer, talking about the perils of inflated paper money — fiat currency not backed by gold — issued by governments throughout history. And then the big finish: "...So I would ask you, can you see any corollary whatsoever on what you're asked to do in running our monetary system to that which Enron was involved in?"
If you were watching on CNBC you didn't get to see Greenspan's answer, because the network cut away then. But Greenspan did answer, and if you read the transcripts you'll find that he gave a respectful answer — perhaps even a thoughtful answer — to what might seem like a deliberately provocative question — perhaps even an off-the-wall question.
Greenspan admitted that "...in years past, there's been considerable evidence that fiat currencies have been mismanaged in general and that inflation has been too often the result.... There is some evidence that we are learning how to manage a fiat currency.... The evidence of recent decades is that it has been succeeding. Whether that continues is a forecast which I can't really project on."
And about that comparison to Enron? "And I don't perceive that anything we're doing as a central bank involves anything related to that. I hope that where we need to be transparent and indicate what we are doing, we do so, except in those areas where it...inhibits the ability to actually function as a central bank. But as I say in summary, I hope your analogy is inappropriate."
Congressman Paul told me Thursday that Greenspan is used to these out-of-the-box questions from him that cast doubt on the very legitimacy of the Federal Reserve. "My questions are always on the same subject. If I don't bring up the issue of hard money vs. fiat money, Greenspan himself does."
But at the same time, Paul says that he wasn't satisfied with Greenspan's answer. "I got what I expected: a nonanswer. He never gets into anything of substance, but, he does have a lingering doubt — he's not sure the system will work. He's a gold-standard person, but he's talked himself into believing he's the best manager in the world, and I just disagree with that."
Paul is a die-hard libertarian, who won't vote for any bill before the House — no matter how worthy it may seem — if he can't find a specific provision in the U.S. Constitution that empowers Congress to do what the bill proposes. And in that spirit, he thinks that the Federal Reserve has no right to exist in the first place. Paul told me, "All we'd have to do is support the Constitution and we'd abolish the Fed. The Federal Reserve Act is unconstitutional — nowhere in the Constitution does it say that Congress can create a central bank."
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<a href="http://www.house.gov/paul/legis.shtml">http://www.house.gov/paul/legis.shtml</a>
Ron Paul's Texas Straight Talk - A weekly Column
The Maestro Changes his Tune
February 21, 2005
Nearly 40 years ago, Federal Reserve chair Alan Greenspan wrote persuasively in favor of a gold monetary standard in an essay entitled Gold and Economic Freedom. In that essay he neatly summarized the fundamental problem with fiat currency in a few short sentences: “The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… 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… Deficit spending is simply a scheme for the ‘hidden’ 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.”
Today, however, Mr. Greenspan has become one of those central planners he once denounced, and his views on fiat currency have changed accordingly. As the ultimate insider, he cannot or will not challenge the status quo, no matter what the consequences to the American economy. To renounce the fiat system now would mean renouncing the Fed itself, and his entire public career with it. The only question is whether history will properly reflect the destructive nature of Mr. Greenspan’s tenure.
I had an opportunity to ask him about his change of heart when he appeared before the House Financial Services committee last week. Although Mr. Greenspan is a master of evasion, he was surprisingly forthright in his responses to me. In short, he claimed he was wrong about his predictions of calamity for the fiat U.S. dollar, that the Federal Reserve does a good job of essentially mimicking a gold standard, and that inflation is well under control. He even made the preposterous assertion that the Fed does not facilitate government expansion and deficit spending. In other words, he utterly repudiated the arguments he made 40 years ago. Yet this begs the question: If he was so wrong in the past, why should we listen to him now?
First, the Federal Reserve does not mimic a gold standard by any measure. The clearest example of this lies in our current account deficit, which our fiat currency encourages. Under a gold standard we would not have exchange rate distortions between the Chinese renminbi and the U.S. dollar, for example. True currency stability is impossible when fiat dollars can be produced at will and foreign lenders bankroll our deficits.
Second, inflation is a much greater problem than the federal government admits. Health care, housing, and energy are three areas where costs have risen dramatically. The producer price index is rising at the fastest rate in seven years. Bond prices are rising. To suggest that rapid expansion of the money supply and artificially low interest rates do not ultimately cause price inflation is absurd.
Third, Fed policies do indeed have adverse political ramifications. Fiat currency and big government go hand-in-hand. Without a gold standard, Congress is free to spend recklessly and fall back on monetary expansion to pay the bills. Politically, it’s easier to print new dollars than raise taxes or borrow overseas. The Fed in essence creates paper reserves that enable Congress to undertake spending measures that far exceed tax revenues. The ill effects of this process are not felt by the politicians, who can always find popular support for new spending. Average Americans suffer, however, when their dollars are “confiscated through inflation,” as Mr. Greenspan termed it.
It’s not enough to question the wisdom of Mr. Greenspan. Americans should question why we have a central bank at all, and whose interests it serves. The laws of supply and demand work better than any central banker to determine both the correct supply of money in the economy and the interest rate at which capital is available- without the political favoritism and secrecy that characterize central banks. Americans should not tolerate the manipulation of our economy and the inflation of our currency by an unaccountable institution.
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<a href="http://www.dailyreckoning.com/Writers/Mogambo/DREssays/AlanGreenspanisDestroyingYourMoney.html">http://www.dailyreckoning.com/Writers/Mogambo/DREssays/AlanGreenspanisDestroyingYourMoney.html</a>
-Over at Kitco we see that gold lease rates have risen dramatically, and have apparently bottomed. Hmmmm. But before you declare the onset of the gold bull, Paul van Eeden says, "This rise in the gold price, as has been the case for the past three years, is mostly a dollar phenomenon. It’s a bear market in the dollar, not a bull market in gold." To which I add, "Not yet, anyway. But with all the countries on the face of the freaking planet expanding their money supplies with heart-stopping insanity, it soon WILL be a global bull market, as price inflation will follow their monetary inflations, too!"
Speaking of inflation, I know that you are tired of me talking about it. Now let's take a look at it up close and personal. The latest report shows that the January monthly prices for imported consumer goods (other than automobiles) increased 0.4 percent, the most since January of last year.
The cost of ALL imported goods last month was 6 percent greater than in January 2004. Excluding petroleum, they were up 3 percent from the same month last year. The price of oil jumped 27% t in the last twelve months! And today (Tuesday, 2/22) the price of a barrel of crude jumped by over two bucks, to over $50 a barrel!
And while we are at it, let's take a look at producer prices. As Bloomberg puts it, "The 0.8 percent increase in the Labor Department's producer price index, excluding food and energy, was the most in more than six years."
Eerily similar, the Yahoo! News report said, "The producer price index, which measures prices received by farms, factories and refineries, moved up 0.3 percent in the month, the department said. But the core index, which strips out volatile food and energy prices, shot up 0.8 percent, the biggest gain since December 1998."
For those of you who cannot bear the thought of being labeled a gold bug or having any similarity to The Mogambo for that matter, but still want to participate in the price inflation, a reader code-named Shepardess notes, "The MOST prized possession in post WWI Germany [and post WWII] was cooking oil, cigarettes and booze."
-The Christian Science Monitor writes that, "Foreigners worry about the stability of the dollar because Americans are overspending. There's the growing budget deficit, of course. But of equal importance for currency traders is the $617.7 billion imbalance between what the US buys and what it sells abroad. Americans are spending about 5.7 percent more than the nation itself produces. At the moment, the US must borrow $55 billion a month, $1.8 billion a day, to finance its massive deficit in international payments. Over time, the decline in the dollar should readjust that balance, since US exports will become more competitive and imports more expensive." Which is exactly what we are seeing!
-Thomson Financial, an information firm in New York, says, "A boom in foreign purchases of US firms, now seen as a bargain, may have started. Last year, 1,126 US businesses were sold to foreign buyers, up from 1,032 in 2003 and 980 in 2002." This is how Thomas Jefferson came to say something about how fiat money will ruin us and that we will, and I am quoting from memory: "Wake up homeless on the continent their forefathers gave them." They will have strong money and we will have weak money, and thus they can buy us, lock, stock and barrel.
-One of the big arguments for privatization of Social Security is that Chile has had personal retirement accounts for quite awhile, and, "Established in 1981, Chile’s personal savings account system has yielded an average of 10 percent return on investments. The primary investment vehicles are stocks and corporate and government bonds." This is statistical quackery, and do not listen to anybody who parrots this nonsense.
-A reader named Darrin sent an interesting little bit of research that he has done. He writes, "Here's a little something that I noticed a few months ago. Pennies dated 1981 and earlier are 3.11 grams of 95% copper, or about 2.95 grams of copper. Expressed in units that the rest of us understand, there is 1 pound of copper in 153.5 pennies.
"The latest copper price from kitcometals.com is $1.51 per pound. It is nearly worthwhile to take the change jar and the kid's piggy bank to a scrap metal dealer.
"The people around me don't quite grasp currency debasement, inflation, world markets, and all of that economic stuff, but when I show them that even pennies aren't what they used to be, it looks like they begin to get the message."
-A lot of people were watching Alan Greenspan testify at the House Finance Committee, and like a lot of us, most thought it was a laugh-riot. Peter Schiff of EuroPacific Capital is one of them, and in an essay, "Greenspan Tells More Whoppers," he writes, "Like a kid in a candy shop I don't know where to start in refuting these claims. Perhaps the most memorable moment of the entire spectacle was Congressman Ron Paul quoting Greenspan to Greenspan, requiring the chairman to admit that his younger self was wrong. Unfortunately, Greenspan the younger was not wrong, just early. It seems only fitting that in a testimony fraught with contradictions, Greenspan's greatest critic was in fact himself.".................
..............................................In fact, he said as much! He said: “We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power.” But he can! He is guaranteeing less purchasing power by his every word and deed since 1998!
Ron Paul asked him whether a gold standard would prevent the government from amassing such huge debts. He replied, " I think we have been remarkably successful, in my judgment … mimicking much of what the gold standard does… I think in that context so far we have maintained a stable monetary system.” Hahahaha! What an idiot! His monetary system has ZERO is common with a gold standard! What does he think we are? A bunch of chumps that we don’t know what a gold standard is? Hahahaha! ............................
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