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While Bernanke struggles to downplay investing in gold coins and play up the wonders of Wall Street, his predecessor, Alan Greenspan, has come out with a most welcome contradiction.

August 31, 2011 – While Bernanke struggles to downplay investing in gold coins and play up the wonders of Wall Street, his predecessor, Alan Greenspan, has come out with a most welcome contradiction. It is even more remarkable considering Greenspan set the machinery in motion.

Debunking Bernanke’s dogged insistence that gold is not money, the former chairman minced no words: “Gold, unlike all other commodities, is a currency.” And he adds the demand that is driving up prices is “a fiat money system, paper money, that seems to be deteriorating.”

Greenspan is particularly concerned about the euro, which he believes is seriously hurting the American economy. “The general feeling out there is of a lull before the storm,” Greenspan said.

The Greenspan that held the reins at the Fed is very much at odds with both the former man and the man he is today. In a 1966 essay Greenspan argued “in the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value … 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.”

More than four decades ago Greenspan warned that “the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes.” The politicians knew they couldn’t keep raising taxes to fund the welfare state and stay in office so “they had to resort to programs of massive deficit spending.”

It would seem that Greenspan succumbed to hypocrisy on his way up the ladder, but now he is making an attempt to rectify some of the Fed’s misdeeds. He knows the game all to well and we should pay close attention to what he has to say. Especially when deciding whether or not to invest in gold coins.

Kevin Johnson

Senior Staff Writer – GoldCoin.net

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