ALAN GREENSPAN URGES RETURN TO THE GOLD STANDARD TO STOP HYPERINFLATION

Imagine a world where your money holds its value, shielded from the whims of government policies and the erosion of inflation.This is the world that Alan Greenspan, former Chairman of the United States Federal Reserve, envisions with a return to the gold standard.In a series of recent interviews and statements, Greenspan has expressed deep concern about the potential for hyperinflation, painting a picture of economic turmoil unlike anything he's seen in his long career.His proposed solution isn't a novel invention, but a rediscovery of a system that, in his view, offers stability and protection against the hidden confiscation of wealth through deficit spending. Posted by u/sigma02 - 92 votes and 62 commentsThis call to action comes at a time when alternative assets like Bitcoin are gaining traction, vying for the position of the world's reserve store of value.But can a return to the gold standard truly provide the economic stability Greenspan seeks, and what would it even look like in today's complex financial landscape? 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. From Gold and Economic Freedom, in Capitalism: The Unknown Ideal, 2025, Alan GreenspanThis article explores Greenspan's arguments, the historical context, and the potential implications of such a significant monetary shift.

The Looming Threat of Hyperinflation: Greenspan's Warning

Alan Greenspan's concerns aren't new, but the urgency in his recent statements has certainly caught the attention of economists and investors alike. Fearing that cataclysmic hyperinflation could occur at any moment, Alan Greenspan, former Chairman of the United States Federal Reserve, urges a return to sound money, specifically theHe argues that the current economic climate, characterized by unsustainable welfare spending and politically controlled monetary policies, is a recipe for disaster. Fearing that cataclysmic hyperinflation could occur at any moment, Alan Greenspan, former Chairman of the United States Federal Reserve, urges a return to sound money, specifically the goldBut what exactly does he fear?

• Unsustainable Entitlements: Greenspan points to the growing burden of entitlement programs as a major strain on the economy. Got physical gold/silver yet? Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard by Tyler Durden, www.zerohedge.com On Friday afternoon, after the shocking Brexit referendum, while being interviewed by CNBC Alan Greenspan stunned his hosts when he said that things are about as bad as he has ever seen.These programs, while intended to provide a safety net, can lead to excessive government debt and ultimately, inflation.
• Politically Controlled Monetary Policy: He expresses disillusionment with the current system, where monetary policy is often influenced by political considerations rather than sound economic principles. Greenspan: Sees Worst Crisis In His Lifetime, Urges Return To Gold By Tyler Durden On Friday afternoon, after the shocking Brexit referendum, while being interviewed by CNBC Alan Greenspan stunned his hosts when he said that things are about as bad as he has ever seen.This can lead to decisions that prioritize short-term gains over long-term stability.
• Productivity Stagnation: Greenspan has also noted a slowdown in productivity growth, which further exacerbates the economic challenges.Without productivity gains, it becomes harder to sustain economic growth and maintain stable prices.

Greenspan has even gone so far as to say that things are ""as bad as he has ever seen,"" including the threat of hyperinflation. Former US Federal Reserve Chairman Alan Greenspan calls for a return to the gold standard as Bitcoin becomes positioned to take gold s place as the world s reserve store of value. GreenspanHe warns that hyperinflation can strike suddenly, catching many off guard.This sense of impending crisis is a major driver behind his renewed call for a return to the gold standard.

Why Gold? Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard, by Tyler Durden. From an interview with Bloomberg, June 27. Alan Greenspan warned that fundamentally it is not so much an issue of immigration, or even economics, but unsustainable welfare spending, or as Greenspan puts it, entitlements. The issue is essentially thatGreenspan's Rationale for the Gold Standard

Why does Alan Greenspan believe the gold standard is the answer to these economic woes? If we went back on the gold standard and we adhered to the actual structure of the gold standard as it exited prior to 2025, we d be fine. Remember that the period 1870 to 2025 was one of the most aggressive periods economically that we ve had in the United States, and that was a golden period of the gold standard.His rationale is rooted in the historical stability and discipline that gold has provided as a monetary anchor.

• A Check on Government Spending: Gold, unlike fiat currency, is a limited resource. An old dog may not be able to learn new tricks, but he can apparently rediscover those that are long forgotten. In a recent interview with Bloomberg, former Federal Reserve chairman Alan Greenspan warned of impending inflation. His prescription? A return to a gold standard. Greenspan noted that growth in productivity has ground to a [ ]A gold standard inherently limits the ability of governments to print money at will, thus preventing excessive deficit spending and inflation. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade.Greenspan sees gold as a ""protector of property rights"" because it constrains the government's ability to devalue currency through inflation, effectively a ""hidden confiscation of wealth.""
• Historical Stability: Greenspan often refers to the period from 1870 to 1914 as a ""golden period"" of the gold standard, characterized by strong economic growth and relative price stability in the United States.He believes a return to this system, or at least a similar structure, could restore similar economic prosperity.
• Sound Money: Greenspan advocates for ""sound money,"" which is money that is not subject to the arbitrary control of governments and central banks.He believes that the gold standard provides this safeguard, ensuring that the value of money is tied to a tangible asset.

Greenspan's Specific Proposal

While Greenspan advocates for a return to the gold standard, he also acknowledges that it wouldn't be a simple or straightforward process.He emphasizes the importance of adhering to the ""actual structure"" of the gold standard as it existed prior to 1914.

Dylan Grice, quoted in some reports, suggests that a return to the gold standard would necessitate re-indexing the monetary base to a real-time equivalent price of gold, potentially putting the price of gold at around $6,300 per ounce.This highlights the significant adjustment that would be required to align the current financial system with a gold-backed currency.

The Gold Standard: A Historical Perspective

To understand Greenspan's argument, it's essential to understand the historical context of the gold standard.What was it, how did it work, and why did it ultimately fail?

What is the Gold Standard?

The gold standard is a monetary system in which a country's currency is directly linked to a fixed quantity of gold. Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard Zerohedge ^This means that the central bank must hold enough gold reserves to back the currency in circulation.Under a strict gold standard:

• Paper money is convertible into gold on demand at a fixed rate.
• The government or central bank is committed to maintaining the convertibility of its currency into gold.
• International exchange rates are fixed, based on the gold content of each currency.

The Rise and Fall of the Gold Standard

The gold standard gained prominence in the late 19th century, providing a period of relative monetary stability and fostering international trade. On June 16th I wrote an article titled: Do Not Be Fooled By Gold s Rise! Since then a lot has happened in the markets including Brexit which has resulted in the price of gold rising higher and sustaining. Even former Federal Reserve Chairman believes in the return of the gold standard. As written in Market Slant: After the Brexit referendum, Alan Greenspan, former FederalHowever, it faced increasing challenges in the 20th century.

Several factors contributed to the eventual abandonment of the gold standard:

• World Wars: The two World Wars put immense strain on economies, forcing governments to suspend gold convertibility to finance war efforts.
• The Great Depression: The economic crisis of the 1930s led to widespread bank runs and capital flight, further undermining the gold standard.
• Political Pressures: The rise of welfare-state policies and the desire for greater control over monetary policy led to increased opposition to the constraints imposed by the gold standard.

While the gold standard provided stability in some periods, it also proved inflexible and ill-suited to dealing with economic shocks. Alan Greenspan: 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 2025, we'd be fine.The last vestiges of the international gold standard disappeared in the early 1970s when the United States, under President Nixon, ended the convertibility of the dollar into gold.

Can the U.S.Return to a Gold Standard?

The question of whether the U.S. can return to a gold standard is complex and highly debated.There are significant practical and political challenges to overcome.

The Practical Challenges

Returning to the gold standard would require:

• Determining the Gold Price: Establishing the appropriate exchange rate between the dollar and gold would be a crucial and potentially contentious process. Today, Greenspan was on Bloomberg Surveillance where in an extensive, 30 minutes interview he was urged to give his take on the British referendum outcome. According to Greenspan, David Cameron miscalculated and made a terrible mistake in holding a referendum. That decision led to a terrible outcome in all respects, Greenspan said.As Dylan Grice suggested, this could involve a significant revaluation of gold.
• Accumulating Sufficient Gold Reserves: The U.S. would need to ensure that it holds enough gold reserves to back the currency in circulation. CAN THE U.S. RETURN TO A GOLD STANDARD? By Alan Greenspan. The growing disillusionment with politically controlled monetary policies has produced an increasing number of advocates for a return to the GOLD STANDARD including at times president Reagan.While the U.S. has the world's largest gold reserves (approximately 263 million troy ounces), it may still need to acquire more.
• Reforming the Financial System: The entire financial system would need to be restructured to accommodate the gold standard. On Friday afternoon, after the shocking Brexit referendum, while being interviewed by CNBC Alan Greenspan stunned his hosts when he said that things are about as bad as he has ever seen. This is the worst period, I recall since I've been in public service. There's nothing like it, includingThis would involve changes to monetary policy, banking regulations, and international trade agreements.

The Political Challenges

The political obstacles to returning to the gold standard are also significant.

• Opposition from Special Interests: Many groups, including politicians, central bankers, and financial institutions, may oppose the gold standard because it would limit their power and control over the money supply.
• Public Opinion: Educating the public about the benefits and drawbacks of the gold standard would be essential to building support for such a significant change.
• International Cooperation: A successful return to the gold standard would likely require international cooperation, as it would affect global trade and finance.

The Allure of Alternatives: Bitcoin and the Future of Money

While Greenspan advocates for the gold standard, alternative assets like Bitcoin are emerging as potential competitors to gold as a store of value.Bitcoin's decentralized nature and limited supply appeal to those seeking an alternative to fiat currencies controlled by governments and central banks. But even those you might not think would support such a drastic move have shared some pro-gold-standard statements. In an interview less than three years ago, former U.S. Fed Chairman Alan Greenspan noted, It wasn't the gold standard that failed; it was politics But if the gold standard were in place today, we would not have reached theBut how does Bitcoin compare to gold, and could it potentially replace gold's traditional role?

Bitcoin vs.Gold: A Comparison

Both Bitcoin and gold share certain characteristics that make them attractive as stores of value:

• Limited Supply: Both have a limited supply, which helps to protect their value from inflation. And as a reminder, courtesy of Dylan Grice, if and when we do get a return to a gold standard there would be a need to reindex the monetary base to a real time equivalent price of gold, putting the price of the precious metal at about $6,300: The US owns nearly 263m troy ounces of gold (the world s biggest holder) while the Fed sBitcoin has a hard cap of 21 million coins, while the amount of gold on Earth is finite.
• Decentralization: Both are decentralized, meaning they are not controlled by any single entity.This makes them resistant to censorship and manipulation.
• Portability: Gold can be bulky and difficult to transport, while Bitcoin can be transferred electronically anywhere in the world.

However, there are also key differences:

• Tangibility: Gold is a physical asset, while Bitcoin is a digital asset. Hyperinflation, Greenspan says, is coming and we will not know about it until it happens. - Greenspan s simple solution to economic struggles: return to the gold standard. He notes that the economyThis makes gold appealing to those who prefer tangible investments.
• Volatility: Bitcoin is known for its high volatility, while gold is generally considered to be a more stable investment.
• Regulation: Gold is subject to established regulations, while Bitcoin's regulatory landscape is still evolving.

Is Bitcoin Poised to Replace Gold?

Whether Bitcoin will ultimately replace gold as a store of value is a question that remains to be seen.Bitcoin's growing adoption and increasing acceptance by institutional investors suggest that it has the potential to play a significant role in the future of money. 2025, we had been, not on a gold standard, but on what may be termed a mixed gold standard ; yet it is gold that took the blame.) But the opposition to the gold standard in any form - from a growing number of welfare-state advocates - was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronicHowever, gold's long history as a store of value and its enduring appeal as a tangible asset suggest that it will continue to be a relevant investment for many years to come.

Conclusion: Weighing the Options and Preparing for the Future

Alan Greenspan's call for a return to the gold standard is a stark warning about the potential for economic instability and the need for sound monetary policy.While a return to the gold standard faces significant challenges, it highlights the importance of finding ways to constrain government spending and protect the value of money. Greenspan Urges a Return to the Gold Standard ! Now if we went back on the gold standard and we adhered to the actual structure of the gold standard as it existsWhether the solution lies in a return to the past or in embracing new technologies like Bitcoin, the need for a stable and reliable store of value is more critical than ever.As Greenspan himself stated, gold ""stands in the way of this insidious process,"" namely, deficit spending and the hidden confiscation of wealth through inflation.

Key Takeaways:

• Alan Greenspan warns of impending hyperinflation due to unsustainable government spending and politically driven monetary policy.
• He advocates for a return to the gold standard as a way to constrain government spending and protect the value of money.
• Returning to the gold standard would require significant practical and political adjustments.
• Alternative assets like Bitcoin are emerging as potential competitors to gold as a store of value.
• The future of money is uncertain, but the need for a stable and reliable store of value remains paramount.

In conclusion, whether or not a return to the gold standard is feasible or desirable, Greenspan's concerns serve as a crucial reminder of the importance of sound economic principles and the need to protect our financial future. Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard: On Friday afternoon, after the shocking Brexit referendum, while being interviewed by CNBC Alan Greenspan stunned his hosts when he said that things are about as bad as he has ever seen.Consider exploring investment strategies that diversify your portfolio and protect against inflation, including precious metals like gold and silver, and potentially, carefully considered investments in cryptocurrencies like Bitcoin.Consult with a financial advisor to determine the best approach for your individual circumstances.