Fed Heads Lose Their Head

It is a brilliant scheme that has only been possible with the absence of a gold standard and by creating megatons of worthless fiat money out of thin air.

When Greenspan was Fed head, he had to conveniently suppress his fondness of gold so he developed his own gobbledygook Fedspeak.

He admitted it himself:

“Since becoming a central banker, I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said.”
Speaking to a Senate Committee in 1987.

At least he clearly had a good sense of humor!

In a testimony before the Committee on Banking and Financial Services, U.S. House of Representatives July 24, 1998, Greenspan dared to mention his fondness for gold:

“I am one of the rare people who have still some nostalgic view about the old gold standard, as you know, but I must tell you, I am in a very small minority among my colleagues on that issue.”

BERNANKE ON GOLD

The most classic exchange of the role of gold was when Bernanke delivered his report to the House Financial Services Committee in July 2011. At the time gold was $1,560.

When questioned by Ron Paul, Bernanke states that: “The reason people hold gold is to protect against tail risk, a really, really bad outcome”.

Paul goes on to ask: “Is gold money?”

“No” answers Bernanke after long hesitation…… “it is an asset”.

“So why do central banks hold gold,” asks Paul – “Well it is a tradition” answers Bernanke”.

So according to Bernanke gold is not money, but a tradition.

Interesting that the Fed stores 8,000 tonnes of “traditions” in Fort Knox and other vaults.

Bernanke conveniently omitted to mention that people hold gold to protect against a precipitous collapse of the dollar. At the time, the dollar had lost 82% in real terms in the 21st century and 98% since 1971.

This is what Bernanke calls tradition. What he doesn’t say is that it is the only money which has survived in history due to the total mismanagement of monetary policy by central banks.

POWELL ON GOLD

The current Fed head also has, not unexpectedly, very little understanding of gold. In a recent discussion at the Bank for International Settlement (BIS) Powell described Bitcoin as an asset that is not backed by anything.

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