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I'm not a gold bug but Alan was a proponent of the gold standard. He wrote about how the gold standard created responsible spending and more equality in the world:

https://ritholtz.com/2008/11/gold-and-economic-freedom-by-al...

The world we are in now, especially in the US, is one where there is near unlimited government credit but it is, according to many, papering over deep structural problems. At some point, these chickens will come home to roost in some way or another. But it is hard to predict when.

So he was in favour of the gold standard because it prevented massive unconstrained expansion of credit and that seems sensible.

> He wrote about how the gold standard created responsible spending and more equality in the world:

The Gilded Age, which had quite high levels of inequality, occurred when the gold standard was active:

* https://en.wikipedia.org/wiki/Gilded_Age

It should also be noted that the gold standard did not bring any kind of price stability:

* https://archive.is/https://www.theatlantic.com/business/arch...

Further, sticking to the gold standard made the Great Depression worse as it reduced flexibility and options of central banks had, and made deflation worse:

* https://www.nber.org/papers/w3488

The sooner countries left the gold standard the sooner they started recovering from the Great Depression:

* https://www.nber.org/papers/w27586

He also oversaw the economy for twenty years before one of the worst recessions in the world. He helped set the stage for multiple disasters with his policies, so I'd take his opinions with a grain of salt.
39 trillion in debt with no Congressional stomach for...

- spending cuts

- stopping fraud

- figuring out how the net worth of people in Congress increases from hundreds of thousands of dollars to 10s or 100s of millions of dollars

- addressing wasteful and ineffective programs

Given those issues, the only solution will be inflation. The circling the drain moment will hit with the associated welfare programs get a direct staple to inflation itself, so we will spend more to combat inflation, causing more inflation faster.

It's not going to be fun.

> ...it prevented massive unconstrained expansion of credit and that seems sensible.

At the height of the Great Depression (1936), some economists proposed The Chicago Plan to separate the provision of credit from the money supply by eliminating fractional reserve banking, giving better control of the increases and contractions of credit, the elimination of bank runs, and a dramatic reduction in debt. There was a recent (2012) paper from the IMF [1] that seemed to find this actually is pretty sensible, although I do not claim to be smart enough to understand all of the implications.

[1] https://www.imf.org/en/publications/wp/issues/2016/12/31/the...

I have come around to gold. Money shouldn't be dual purposes, we should apply single responsibility principal. Money should refer to some stable (albeit slightly growing by nature) account of measure.

Prices should get cheaper. That's a progress dividend. We get better at growing food every year, why shouldn't food get cheaper? Imagine a world in which prices regularly go down. You're a passive beneficiary of technological progress.

The argument that prices can't get cheaper or [bad thing will happen] was never very convincing to me. Prices already do get cheaper for large swaths of the economy that have technological progress grow faster than money supply. Cell phones are rapidly depreciating. You can wait 6m to a year and get a significant discount on the latest iPhone version. People don't stop buying iPhones, and Apple doesn't stop investing in iPhones. This is even more true w/ AI models. Investors/companies are burning billions to build tech that will only get cheaper and obsolete in years if not months.

So if you were to try to convince me that deflation would reduce investment or spending, tell me why this doesn't apply to tech products that get cheaper every year.

The gold standard makes zero sense. Why should the amount of money the economy needs have any relation to the amount of gold a country holds?

What happens in practice is that you set a conversion rate to account for this, and basically immediately things start to drift further and further out of whack leading to massive distortion. There's a reason the gold standard era was a cycle of big swings of inflation and deflation, with panics, recessions, crashes pretty continually.

It's the same with fixed or pegged exchange rates - you can set it to something reasonable at the start but it will always drift, usually until things are distorted that the system fails. That's why we don't have a gold standard anymore and why fixed exchange rates have all mostly failed and gone away too.

There's just no reason to believe that pegs to commodities or other currencies would ever correspond to the amount of money that the economy needs to be in circulation, so they always fail.

The gold standard and metalism generally, leads to all kinds of unproductive panics bc the quantity of money can’t wisely be adjusted to the situation. It’s a bad trade off, bc it’s well-known in the literature that inflation-targeting works (and that’s the current world-wide central bank policy since 1991).
It is well know there weren't deep structural problems at the time of (and caused by) the gold standard...

I don't understand why people keep banging about the theoretical advantaged of a gold standard whan it was the default monetary system for centuries and we have firsthand evidence of the problems it causes (and certainly not more equality in the world!). It has been tried by the whole Earth during several generations.

If you think, like Greenspan and others, that there ought to be a mechanism to force some monetary restraint on governments, try to think of a new mechanism, because the "old way" wasn't better. We know it. Move on.

There’s no roosting. It’s frog boiling. Every day your money loses value.

That’s why stocks go up, spending goes up and the asset class gets richer. When you peg these to an arbitrary “value” you can see, companies aren’t getting trillions of dollars more efficient, the government isn’t delivering more services and the utility of a business or property hasn’t increased.

> So he was in favour of the gold standard because it prevented massive unconstrained expansion of credit and that seems sensible.

That's because it permanently cripples economies by creating an artificial constraint and pretending it's useful. All it does is create another speculation market in gold and cripple credit markets.

There isn't enough gold to use as a common currency.

As I understand it, all the gold that has ever been mined would fit in a cube the size of a baseball diamond.

https://www.businessinsider.com/warren-buffetts-lesson-on-go...

Nixon was responsible for ending the silver standard.

https://www.usmoneyreserve.com/news/executive-insights/when-...

https://en.wikipedia.org/wiki/Silver_standard#United_States

Have you ever read Bertrand Russell's critique of the gold standard in his essay The Modern Midas? It's in the collection "In Praise of Idleness".

It's worth reading all of them, even if you disagree with most of it.

Big picture is credit gives the individual a chance. That occurred in the 80s and since we've have more go from rags to riches than all of history combined.

I hated the system but it's fair. English and the allied forces inherited the western world and nobody was willing to claim it, the king of England gave it to his daughter.

Gold should be revalued but we're entering a phase where America is leaving law and order for law and equity. Essentially WW2 is ending but most never bothered to consider if there's a goal to all the chaos.

Responsibility is not something that the current market players want to see, whether it be through the gold standard, reasonable interest rates, or any other mechanism. They'll argue that the next big thing is simply too expensive for that sort of constraint.
Gold based money, or eras of coinage, historically have been times of war and slavery. The debt system we are in now is far better in a lot of ways. The outcome of what happens depends on the political will deciding where the credit flows.
I always wondered how someone who wrote that could go on to chair the fed with LIRP policies that fueled crazy asset bubbles.
It's impossible to talk about the supposed benefit of the Gold Standard without saying that it's a completely arbitrary constraint.

Basing currency on a shiny rock is the stupidest idea ever, that only happens to work because it plays into the worst of human convictions, which is egosim around fraud and debasement of currency.

Gold Standards are like very strong medicine with bad effects.

Notably, they would almost assuredly hold back the economy and cause deflationary traps.

The economy needs a bit more currency as it expands and that's that.

Tying the ability to increase the money supply to a metal we have to dig out of the ground is ridiculous.

>near unlimited government credit

Really? How do we get some? And, beyond that, what do YOU think the limits should be on increasing the money supply by a sovereign nation?

A nation becomes wealthy by producing things to sell. Nothing else matters, including debt. But, we live in a world where people want to be rich, but also don't want to use resources, or build, or manufacture things, or run an empire. It's contradictory, and we are starting to see the effects.

Margaret Thatcher said "The problem with socialism is that you eventually run out of other people's money."

I feel like the problem that Greenspan, Bernanke, and friends have found is that the problem with capitalism is that you never run out of the government's money.

Greenspan was also the subject in the weird comics "h4x0r economist"/"haxor economist", which thankfully still live on since its early internet days https://www.rdwarf.com/users/kioh/ (NSFW language)
Chaos theory and all but my career in tech doesn’t happen without haxor economist. My Econ major collided with it somehow and a year later ended up with a CS degree.
I don't get this comic at all but I really miss when random stuff like this got published online!
This should be the top comment, at least for today.
When I was in high school in the 90s, and just discovering the world of money and finance, I stumbled on Alan Greenspan and instantly liked some of his thinking about it. I tried my best to learn from everything he did, read every news article I could find, followed rates, the economics of money, the impact on markets, and more. I learned more about government politics and money and influence from that experience than I have since! I'll admit that my mindset about the Fed and money in general is very much due to what I learned in those impressionable years.
My favorite bit of Greenspan lore:

Texas Senator Phil Gramm (pretty sure it was him) was a prominent GOP member of the Senate Banking Committee. Of course, Greenspan often testified there.

Gramm would always ask Greenspan, along with his other questions, “Mr. Chairman, what’s the ideal capital gains tax rate?”

Greenspan never missed a beat: “Zero.”

Agree or disagree, you always knew where he stood!

IIRC it was Greenspan that didn’t mean to, but did disclose the use of gold swaps, so even if there is all the gold that is claimed to be in Fort Knox, the question of who owns the gold is unanswered.
Interesting bit of trivia, Greenspan was in Ayn Rand's inner circle and read her drafts of Atlas Shrugged as it was being written, and they were close friends until her death.
Mostly I just know Alan Greenspan for being a disciple of Ayn Rand back in the 1950s/60s. Though the Objectivists didn't like his work at the federal reserve. In 2008 he admits to being shocked that banks weren't rationally selfish.
time to watch inside job from 2010 again
For many Americans, Greenspan was the only Fed Chair known widely by name by the general public.
Here is an old clip of Alan Greenspan explaining to Paul Ryan why the social security system can't go bankrupt.

https://youtu.be/DNCZHAQnfGU?is=CWQS-QUJB0z4EfSM

He shaped global monetary policy for nearly two decades. His 2008 admission that his free-market ideology had a "flaw" was one of the most honest moments in central banking history.
I am so confused... so he was a proponent of gold standard but also supported low interest rates and the "Greenspan PUT"?
"Irrational exuberance" - I came to know about him when he said that around 2001. Kinda foresaw the dotcom bubble.
How did a guy who wrote that "gold and economic freedom" wind up running two decades of LIRP?
NYT obituary:

Alan Greenspan, Fed Chairman Through Prosperity and Crisis, Dies at 100

non-paywall: https://www.nytimes.com/2026/06/22/us/alan-greenspan-dead.ht...

Je crois et en effet tandis: enfin l'art de raffiné fe reduit language bien faire.

Mon ouvrage s'es transforme infenfiblement entre mes mains, dans qi'il m'ait été.

[0]: Lavoisier, Traité élémentaire de chimie : présenté dans un ordre nouveau.

Highly recommend the extremely good multipart documentary All Watched Over By Machines Of Loving Grace by Adam Curtis for a fun and wide ranging if slightly silly look at the nexus of Greenspan, Ayn Rand, Silicon Valley, computer technology etc
This is the guy who told everyone to save money by buying property with ARMs and then, post crash, admitted to congress that there a flaw in his economic theory. No shit.
Revisionist history will tell it differently, but I remember that from the mid 1990s until about 2000 when the economy was booming yet prices weren't rising, Greenspan publicly indicated that he wasn't sure exactly why that was. Or at least that the information economy had different performance characteristics than the industrial economy, since production wasn't limited by supply but by worker productivity multipliers.

Why did the cost of living decrease in the 90s but not today? What was different then vs now? Well, after the Dot Bomb and 9/11, the US hasn't followed macroeconomic principles (the main principle being to raise interest rates during increased production to prevent inflation), examine the flip after 2000:

https://www.linkedin.com/posts/richard-clarida-085777125_wea...

Breadcrumbs:

https://financialpost.com/news/alan-greenspan-dies-at-100 (alternative article)

https://www.federalreserve.gov/boarddocs/speeches/1999/19990... (example speech)

https://www.dallasfed.org/~/media/documents/research/swe/200... (analysis pdf)

Note that policy had a greater effect on US economic decline than who the Fed chair was. Specifically, the Gramm-Leach-Bliley Act (GLBA) known as the Financial Services Modernization Act of 1999 (which reversed the Glass–Steagall Act of 1933 and removed barriers in the market among banking companies, securities companies, and insurance companies) allowed investors to gamble with our savings again like before the Great Depression:

https://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

The Housing Bubble popped less than a decade later in 2008.

The Telecommunications Act of 1996 had deregulated the information economy, cementing the duopolies we see today, although the fallout from that arguably wasn't felt until after the arrival of fast mobile internet that coincided with the 2008 financial crisis, which contributed to the high communications prices we pay today vs the rest of the world (imposing a kind of privatized tax on the information economy):

https://en.wikipedia.org/wiki/Telecommunications_Act_of_1996

What I saw then was the last hurrah of US colonialism, which patterned itself off of England but used proxy wars instead of direct colonization. Loosely, keeping Asia down supported western antisocialist goals while simultaneously bolstering capitalist economies. In other words, buying shoes for $5 and selling them for $100 (times everything) allowed the US to transition from blue collar to white collar work.

That resulted in the US closing 100,000 factories under the GW Bush administration of the 2000s. And also outsourcing to China and India, the reduction of pure R&D to almost nothing, massive investment in McMansions and SUVs instead of something like renewable energy, and of course diverting perhaps $3 trillion or more to forever wars in the Middle East to prop up the declining industrial economy which depends on fossil fuels.

That's all changing now as China's buying power is passing that of the US:

https://www.capitaleconomics.com/blog/china-versus-us-size-s...

They don't want to make our stuff for pennies on the dollar anymore, and the US can't carry its own weight without massive reeducation and retooling.

But since the US wasted $40 trillion on its national debt instead of investing in the 21st century economy we thought we are going to get in the 90s, we now see prices increasing in parity with wages. In other words, nearly all excess labor productivity goes towards paying the debt ran up by the previous generation. Thomas Jefferson warned against this:

https://www.meteor.iastate.edu/gccourse/develop/jefferson.ht...

The young are paying the elderly's retirement while being told to eat less avocado toast.

The reason I'm writing this is that the powers that be will try to tell you that we need to cut government spending and taxes to outrun our economic decline. But if you understand everything I just wrote, then you'll see that the damage of 40 years of trickle-down economics and austerity has already been done.

The way out of this is self-evidently to try new approaches favored by the youth who are doing the work but not seeing the benefits like previous generations did. We're living in a second Gilded Age dominated by wage slavery and high wealth inequality:

https://en.wikipedia.org/wiki/Gilded_Age

The way we overcame that was to do the opposite of everything you see the establishment promoting today:

https://en.wikipedia.org/wiki/Progressive_Era

The low-hanging fruit is getting money out of politics (reversing the Citizens United decision), closing the revolving door between the government and lobbyists, antitrust enforcement, and other popular goals.

But real progress looks like FDR-style New Deal taxation on the ultra-wealthy to pay down the public debt, forgiveness of private debts incurred by artificially inflated costs (jubilee) and public funding of the commons (education, healthcare, the energy and communications grids, anything that results in natural monopolies).

Greenspan wouldn't have liked what I just wrote at the end there. But he would have supported the ending of intergenerational debt IMHO. That's why I think it makes a good target for today's youth, when they need a litmus test for deciding whether voting for a proposed policy is in their best interest.

Mr "moral hazard"-- as if the people profit(eer)ing faced any...

I've always wondered if part of the 2008 bust was a psyop from his Ayn Rand beliefs.

It probably wasn't as damaging to the world as the Friedman doctrine but it was pretty darn close.

He was proof that the position is a figurehead.