[Rushtalk] Greenspan Discusses the End of the Fed

Paf Dvorak notmyname at thatswaytoomuch.info
Sat Mar 16 15:40:01 MDT 2013

Greenspan Discusses the End of the Fed ... What Comes Next?


By Anthony Wile


Anthony Wile

An interesting article in Forbes entitled "If 
Greenspan Wants To 'End The Fed', Times Must Be 
Changing," informs us that the predictions we 
made long ago about the 
Reserve are coming true. The author of the 
article is Nathan Lewis, an economist, former 
strategist for institutional investors and author 
of a best-selling book Gold, the Once and Future Money.

Our predictions regarding the Fed were first 
published in May 2009, and were related to a 
congressional hearing that showed Fed 
representatives to be woefully unprepared. This 
was the first inkling we had that the institution 
itself was in perhaps terminal trouble. Here's 
what we wrote at the time in an article entited, 
of the End? Fed Cannot Account for $9 Trillion"...

We saw the interview with Elizabeth Coleman on TV 
and then again and again and again on 
youtube.com. It is entitled "Is Anyone Minding 
the Store at the Federal Reserve?" and it is one 
of the single most astonishing moments (or 
minutes) ever manifested or preserved in this 
already-amazing digital era. A century ago, when 
the powers-that-be pushed through the act that 
set up the American Federal Reserve – which 
basically kicked off the 
banking era in America and abroad – the kind of 
technological ubiquity offered by the Internet 
would certainly have been seen as a major and alarming challenge. Well, it is.

The Grayson/Coleman confrontation has to be seen 
to be believed, and even then it may not seem 
quite believable. How could the Fed, in all its 
monied majesty, offer up someone so unprepared to 
answer the questions of a single quiet and 
persevering congressman? Grayson is a liberal, 
legislator – a good government type who is fast 
making a reputation for taking on government 
corruption. He is pro-regulation but has not been 
shy about confronting high profile institutions. 
He may not want to shut down the Federal Reserve 
but he certainly wants to make it operate under 
additional scrutiny. And he makes it clear he 
believes the Fed needs it. And now Coleman knows it.

Our article continues as follows:

The Fed has survived numerous challenges, but 
always these were fairly restricted to 
legislators and others that traveled in the Fed's 
ambit. There was no chance that the Fed's 
inner-most workings would be broadcast to the 
world, and that the world would see and comment. 
The Internet has changed all that. The basic 
trouble with the Fed – and with all central banks 
– is that the work they do is not defensible 
within the broader context of democratic rhetoric.

Since the article was published some four years 
ago now, the agitation against the Fed and 
central banking generally has grown worse, as we 
predicted. There is no real support for central 
banking. It is a central planning relic of a 
bygone age when justifications could be made 
about a tiny handful of men running the world on behalf of everyone else.

But the Internet has allowed people to question 
– and as there is no good answer, the questions 
have persisted and the skepticism has grown – 
along with central banking's incompetence in 
solving a Great Recession for which they were 
evidently and obviously responsible. Eventually, 
I figure it will burst the confines of the 
Internet and become a mainstream problem.

It is probably inevitable. And now a further 
instance of the gradual deflation of this 
social theme has emerged: The most famous Fed 
chairman of them all, Alan Greenspan, is 
questioning not only the functioning of the Fed 
but its reason for existence. His statements, 
made in a January interview, continue to resonate 
– and circulate – and recently resulted in the 
Forbes article referred to above.

Let's see what Alan Greenspan (according to Forbes) has been saying recently:

"We have at this particular stage a 
money which is essentially money printed by a 
government and it's usually a 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 
standard or a currency board, because unless you 
do that all of history suggest 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 to 1914 period with an international gold standard."

In the same January 2011 interview, Greenspan 
apparently wondered out loud if we even require a 
central bank! When Alan Greenspan starts to talk 
about "End the Fed," things are changing.

The article even refers to our friend and Daily 
Bell interviewee, 
<http://www.thedailybell.com/floatWindow.cfm?id=2101>Edward Griffin:

Edward Griffin's The Creature from Jekyll Island 
is an excellent account of how the Fed came into 
being. The fact that this 1994 book is, today, 
the #2 bestselling book in Amazon.com's Banks and 
Banking category, the #2 bestselling book in the 
Economic Policy and Development category, and the 
#4 bestselling book in the Economic Policy 
category, shows why crowds start chanting "End 
the Fed" wherever 
Paul turns up, with no prompting from him.

The article refers to 
<http://www.thedailybell.com/floatWindow.cfm?id=679>Money Power itself:

In recent years, any attentive watcher has 
noticed that the Fed has been working rather 
closely with certain "Too Big to Fail" banks, in 
ways that are not necessarily in the public's 
best interest. The fact that the Fed is likely 
heavily influenced by a certain well-known 
European banking family ­ a criticism that 
president Andrew Jackson applied to its 
predecessor the Second Bank of the United States, 
just before he killed it ­ is all the more reason 
to eliminate its influence in U.S. affairs.

And here is how the article ends:

As a member of the "keep the Fed" camp in prior 
years, it seems to me now that we will most 
likely come to that point, in not too many years, 
where replacing the Fed will be the best and even 
the easiest path ... End the Fed.

For those who think we're too confident about the 
evolution of this dominant social theme, please 
think about this: The Fed these days is 
reportedly buying most or all of US Treasury 
auctions and already owns well over US$1 trillion 
of American debt. The Fed is buying this debt 
because no one else will. That's a lot of unproductive paper to hold.

Not only that, but the US government owes so much 
money on its national debt that the Fed must keep 
interest rates at almost zero or debt payments 
would balloon until almost the entire federal budget would be consumed by them.

This means, like Sisyphus climbing up the 
mountain with a rock on his back over and over, 
the Fed is doomed to buy US debt at zero percent 
for an unforeseeable – infinite – amount of time. 
This is, of course, an insupportable scenario. 
And thus, we've pointed out that the dollar 
reserve system basically died in 2007-2008 – and 
later on, Alan Greenspan apparently said something similar himself!

The system, it seems, eventually MUST collapse. 
There will be no war, no devaluation, no bailout 
that will likely save the dollar reserve system. 
Instead there will be ... a change.

The wise men running central banking are probably 
as aware of the problems with the dollar economy 
as anyone else; in fact, more so. They've even 
apparently started a faux movement to nationalize 
central banking so as to keep control via the 
political system directly (see 
article on this topic) but even this movement is probably bound to fail.

Another possibility that is obviously being 
considered is the creation of a global paper 
currency via the 
And finally, the powers that be are probably, 
reluctantly, considering a state-managed gold 
standard. Greenspan is apparently going to be a spokesman for this view.

We analyze and follow elite memes but it is not 
possible at this point to say what exactly will 
occur. Best case, a money system emerges that is 
NOT controlled by nation-states and resembles 
somewhat the 
War US system of 
banking and money competition generally.

The pre-Civil War monetary system created the 
"greatest nation on Earth" and one that has now 
morphed into a worldwide empire. But the monetary 
system that has accompanied this expansion may 
well be ending. What comes next is unknown. 
Hopefully it will be freer and fairer than the 
central banking structure of the 20th century.

Paf Dvorak

<http://thatswaytoomuch.info/>notmyname at thatswaytoomuch.info  
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