The only sensible thing that Greenspan said

November 21st, 2007

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We are no fans of Alan Greenspan. Lately, he had been saying a lot of things to the media and even wrote a book. Some of the things he said and wrote are true and some are sheer nonsense. We have issues with some of the things that he said that are true because he was not practicing them when he was head of the Federal Reserve. Take for example his interview with FOX Business Network:

Fox News: “So why do we need a central bank?”

Greenspan: “Well the question is a very interesting one. We have at this particular stage a fiat money which is essentially money printed by a government and it’s usually the central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or currency board or something of that nature because unless you do that, all of history suggests that inflation will take hold with very deleterious effects on economic activity. … There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard”.

Very true.

But he was the one ‘printing’ copious amount of money when he was the chief of the Federal Reserve.