Greenspan on Gold...
"I'm Sorry" time expired...
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When asked by Ron Paul why a 1987 dollar is now worth only 55 cents, and if we are cheating people who save money:
Greenspan: Well Congressman, I think the first thing that we have to recognize is that the inflation rate, properly measured, at this particular stage, has been very close to zero for a very long period of time. In other words, as I said earlier, those numbers (the Consumer Price Index) are biased upwards; because of the way we calculate it.
So, while it is true that a number of statistics you quote go back well before the inflation rate stabilized and are reflecting very substantial inflation pressures that existed, especially in the 1970s when the inflation rate was double digit, but the level of nominal GDP has gone up roughly the same, after certain kinds of adjustments, with what the real underlying GDP, properly measured, would have done, and that tells me that we are not unduly inflating the system.
Paul: Well, I don't think that reconciles with the facts that I can get from the Federal Reserve that shows that our dollar is worth 55 cents compared to 1987. If that's not the reverse of what you see in rising prices and inflation, my dollar just doesn't buy as much anymore and the trend is continuous since 1914, so I don't see how you can say there is no inflation.
Greenspan: You and I have discussed this issue at length many times over the years, and I agree with you in part, but I disagree with you in the other part.
Paul: Can you say anything favorable about gold?
Greenspan: I'm sorry?
Paul: Can you say anything favorable about gold today?
Saxton: The gentleman's time has expired, and we're going to go now to Mr. Hinchey. |
