I don’t know how on earth I missed this one – apparently Alan Greenspan had this to say about his changing belief on gold prices in a recent interview (emphasis someone’s):
Mr. Greenspan replied that he’d thought a lot about gold prices over the years and decided the supply and demand explanations treating gold like other commodities “simply don’t pan out,” as Mr. Malpass characterized Mr. Greenspan. “He’d concluded that gold is simply different,” Mr. Malpass wrote. At one point Mr. Greenspan spoke of how, during World War II, the Allies going into North Africa found gold was insisted on in the payment of bribes. Said the former Fed chairman: “If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it.”
Pulled that off my boy GYSC‘s excellent and eclectic site Economic Disconnect but I think it came from an article in the NY Sun.
Greenie’s coming around to the fact that there are consequences when those Fed Reserve knobs are continually adjusted. The purchasing power of the dollar is compressed and expanded like an accordion each time the Fed forgets its original purpose and concerns itself with reflating asset prices instead of maintaining growth and employment.
Nice to see him get that memo.