Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. […] 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.

— Alan Greenspan, 1961

Since 1978, we have had four different Fed chiefs. Some were smart. Some were honest. Only Paul Volcker was smart and honest. Bernanke was honest… we believe. As near as we can tell, so is Janet Yellen. Both may mean well, but both are careful not to think out of the Deep State box.

Alan Greenspan was smart. But he is a scalawag. He knew all along that the system was corrupt and self-serving. He had explained it in essays he’d written prior to joining the Fed.



The committee, that in hindsight, actually screwed the world (here’s a little hint for TIME, for next time: “committees” have never saved anything). A bunch of quintessential Deep State minions…

Now, Mr. Greenspan is 90 years old. Either he feels the cold downdraft of the beckoning grave… or he is simply forgetting to mumble. In an interview in the wake of Britain’s decision to end its membership of the European Union, he had this to say:

If you look at human history, there are times where we thought that there was no inflation and everything was going fine. […] The oil prices have had a terrific impact on global inflation and would not be surprised to see the next unexpected move to be on the inflation side. You don’t have it until it happens.

The former Fed chairman says he believes another debt crisis is inevitable. He believes it will lead to high levels of inflation. His solution? Gold:

“Now if we went back on the gold standard and we adhered to the actual structure of the gold standard as it exists let’s say, prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the U.S., and that was a golden period of the gold standard.”

He’s right about the pre-Fed decades as well. Real economic growth in the US has never been faster or more equitable than under the gold standard in the much-bewailed “Gilded Age” (much-bewailed by leftists that is – they hate economic progress and free markets) – click to enlarge.



By now the McKinsey report on global debt has become a little dated…if is fair to assume that debt growth has continued at the same pace. While government debt growth rates have slowed slightly since this report was published (Q2 2014), corporate debt growth has taken off like a rocket – click to enlarge.

“Higher stock prices will boost consumer wealth and help increase confidence, which will also spur spending,” said an earnest, but perhaps dim, Ben Bernanke in 2010.

“Increased spending will lead to higher incomes and profits that… will further support economic expansion.”

Six years later, all we see is a misbegotten credit bubble and $60 trillion more, worldwide, of debt.

Alan “Bubbles” Greenspan Returns to Gold