Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Alan Greenspan Confesses

Politics / Central Banks Nov 12, 2014 - 12:46 PM GMT

By: Investment_U


A Note From the Editorial Director: Alex Green's column yesterday struck a nerve. He decried "hard money types" as wrong in five different ways... and the comments at haven't stopped. Dr. Mark Skousen is our favorite hard money type - and, as chance would have it, he just returned from private meetings with none other than Alan Greenspan. Below is Mark's detailed account. - Andrew Snyder

"The Federal Reserve is not independent. I never said it was." - Alan Greenspan

I just returned from the 40th anniversary of the New Orleans Investment Conference, where the keynote speaker was former Fed chairman Alan Greenspan. Although he's 88 years old, he was surprisingly lucid and had a number of things to say about Wall Street.

I passed along a number of tough questions to Gary Alexander, the moderator who did a one-on-one interview, such as:

Question: Did Greenspan's determination to cut interest rates (to 1% in 2004) help create the real estate bubble?

Answer: "When we cut the discount rate to 1% in 2004, nobody complained, not even Milton Friedman. The Fed did not cause the real estate bubble. The real estate crisis was created by HUD (Department of Housing and Urban Development), which required Freddie and Fannie Mae to put a huge percentage of their mortgage holdings into affordable housing."

Question: Is gold money? (A question Congressman Ron Paul asked Ben Bernanke.)

Answer: "Gold and silver are a currency, and the only real money with intrinsic value."

Question: When you were chairman of the National Commission on Social Security Reform, why did you not consider privatization as an option like Chile did?

Answer: "I always favored privatization of Social Security, but the world was against it. We need a crisis in Social Security for privatization to be considered."

Question: Did you foresee the financial crisis of 2008 and the Great Recession?

Answer: "It's almost impossible to predict when a bubble will collapse."

Greenspan also made a number of predictions about the economy and the stock market:

  1. "Too big to fail policy will lead to a stagnating economy."
  1. "Purchases of owner-occupied single family homes are going down and there is no evidence of it coming back."
  1. "Inflation will rise, interest rates will rise, and gold will increase in price, I just don't know when."

Greenspan Sees American Eagle for the First Time

I had a chance to talk with Greenspan one-on-one at a luncheon after his talk. I showed him a 2014 American Eagle silver dollar, and asked him, "Have you seen one of these before? Do you know what it is?" I had bet Gary Alexander that he wouldn't know.

After examining it carefully for a minute or two, Greenspan said, "It doesn't look like the silver dollars I own." He told me he collects Peace and Morgan dollars (minted prior to 1921). Then he said, "I've never seen one of these coins before." I had to explain to the former No. 1 money man in the U.S. that it was an official legal tender silver dollar issued by the U.S. Mint, which it has been doing since 1985 (under the American Gold and Silver Eagle Act signed by President Reagan), and that 40 million are minted every year. He was astonished.

Defending the Fed

Greenspan would be a perfect witness for the defense in "The Federal Reserve on Trial," our mock trial at next year's FreedomFest. I can see Bob Murphy of the Mises Institute (the prosecuting attorney) asking Greenspan, "At what point in your career on Wall Street did you meet up with Mephistopheles and decide to renounce your mentor Ayn Rand and your support of sound money [gold] and sell your soul to the Devil himself, the Federal Reserve?"

Gary Alexander did ask a similar question more politely in New Orleans, and Greenspan answered, "I never changed my philosophy or my views, but in the real world, everything has to be compromised."

I also asked Greenspan if he knew about the mortgage frauds in subprime and no-doc loans going on prior to the 2008 financial crisis. He admitted he did.

I then pointed out that Ben Bernanke, Greenspan's successor, was well aware of his responsibilities in regulating the banks. I attended a talk given by Bernanke at the American Economic Association meetings in January 2007, where he used the words "panic," "crisis" and "stress" 34 times. He anticipated trouble before the real estate collapse of 2007 and the financial crisis of 2008.

Then I asked Greenspan, "Should Ben Bernanke have been fired as the chief banking officer of the United States for knowingly allowing the mortgage frauds of subprime and no-doc loans?"

He shook his head. "The Fed's job is primarily monetary policy, not bank regulation."

One thing Greenspan did say that surprised everyone: "The Federal Reserve is not independent." It is in bed with Washington, especially since 2008.

He thought that ending quantitative easing was a good thing, but would not want to be Fed chairman today. "I wouldn't know what to do," he confessed.

Still, he's bullish on stocks. So are we. Keep buying.

Good investing,

Mark Skousen

P.S. Join us at FreedomFest July 8-11, 2015, at Planet Hollywood, Las Vegas, when we put "The Federal Reserve on Trial." It will pit Robert Murphy of the Mises Institute (prosecuting attorney) against Jeff Madrick, author of The Case for Big Government (defending attorney) with star witnesses Steve Forbes, Alexander Green and David Stockman (former budget director under Reagan). Plus don't miss our Dream Debate of the Century, No. 1 Keynesian and New York Times columnist Paul Krugman vs. No. 1 Supply-Sider and Wall Street Journal columnist Steve Moore! Over 100 speakers in all, including Doug Casey, Peter Thiel, Charles Murray and Dinesh D'Souza. For details, go to, or call Tami Holland, 1-866-266-5101. The first 1,000 to sign up get the "early bird" discount.


Copyright © 1999 - 2014 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email:

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules