Stagflation, Here We Come

What I’ve learned at the Federal Reserve is a new language which is called “Fed speak.” You soon learn to mumble with great incoherence.

– Former Federal Reserve chairman Alan Greenspan

DUBLIN – Alan Greenspan is alive and well. Aged 92, he was on TV yesterday telling viewers that “unless they get control of the debt,” there will be hell to pay.

Greenspan is one of the most interesting characters in modern economics. And, unlike his successors, Bernanke and Yellen, he is not just an academic simpleton. He once had a very clear idea of how economies work. He saw the critical role of gold, for example, and warned that removing it from the U.S. monetary system would lead to trouble.

Here he is in 1966:

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

We invited him to our office in Baltimore in late 2016. We wanted to see if he still had his head screwed on straight. But it was hard to know. Wiley and elusive, Mr. Greenspan resisted direct questions.

Old Fox

Back in the 1970s, Mr. Greenspan’s career took an amazing turn. He must have seen that fame, fortune, and status rarely keep company with a clear-headed, honest economist.

A true economist is an observer of human folly with a sly grin on his face, an ironicist with an empty pocket. He is not a politician, a functionary, a world improver, a booster, a salesman, or a demand manager. And he’s certainly not a miracle worker.

Mr. Greenspan wanted what a true economist couldn’t get – his face on the cover of TIME… and Andrea Mitchell. He knew he couldn’t get either by telling the truth. So he mumbled.

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