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Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Mephisto who wrote (3240)	3/6/2002 2:57:24 AM
From: Baldur Fjvlnisson	Read Replies (1) \| Respond to of 5185

The Greenspan Gadfly By Donald Luskin 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." .................................. freerepublic.com