When in power, he played the role of gold

But now that he´s out, Greenspan writes nostalgically about gold:

The broader issue — a return to the gold standard in any form — is nowhere on anybody’s horizon. It has few supporters in today’s virtually universal embrace of fiat currencies and floating exchange rates. Yet gold has special properties that no other currency, with the possible exception of silver, can claim. For more than two millennia, gold has had virtually unquestioned acceptance as payment. It has never required the credit guarantee of a third party. No questions are raised when gold or direct claims to gold are offered in payment of an obligation; it was the only form of payment, for example, that exporters to Germany would accept as World War II was drawing to a close. Today, the acceptance of fiat money — currency not backed by an asset of intrinsic value — rests on the credit guarantee of sovereign nations endowed with effective taxing power, a guarantee that in crisis conditions has not always matched the universal acceptability of gold.

Golden Greenspan

One thought on “When in power, he played the role of gold

  1. Egads. Et tu Greenspan? And yes, why not silver—it was probably the first metal used for money, in mainland China, where banks are still called “Silver Houses.”

    Of course, there is the metal “electrum” a mix of silver and gold. Maybe we should be on the electrum standard.

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