| ALAN GREENSPAN ON WHY THE GOLD STANDARD HAD TO BE ABANDONED |
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"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.... The law of supply and demand is not to be conned.
As the supply of money increases relative to the supply of tangible assets
in the economy, prices must eventually rise. Thus the earnings saved by
the productive members of the society lose value in terms of goods . When
the economy's books are finally balanced, one finds that this loss in
value represents the goods purchased by the government for welfare or
other purposes.... In the absence of the gold standard, there is no way to
protect savings from confiscation through inflation. There is no safe
store of value. If there were, the government would have to make its
holding illegal, as was done in the case of gold... The financial policy
of the welfare state requires that there be no way for the owners of
wealth to protect themselves. This is the shabby secret of the welfare
statists' tirade against gold. 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, 1967, Alan Greenspan |
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Last revision: April 03, 2009 07:58 AM |
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