Integrity called. It wants its gold back.
Memo To: Rep. Ron Paul [R TX]
From: Jude Wanniski
Re: Greenspan and Gold
Dear Ron…I didn’t watch all of Greenspan’s testimony before the House Financial Affairs Committee last Wednesday, but I was lucky enough to catch the one question they gave you time to ask. Indeed, you were the only member of either your committee or Senate Banking the following day to ask him about gold and its place in the monetary realm. But first, by way of background, you reminded him that with this floating dollar, tied to nothing real, we have a system that is “a convenient way to default on our debt — to liquidate our debt after the inflationary scheme.”
Even you, in the 1960s, described the paper system as a scheme for the confiscation of wealth…. Is it not true that the paper system that we work with today is actually a scheme to default on our debt? And is it not true that, for this reason, that’s a good argument for people not — eventually, at some day — wanting to buy Treasury bills because they will be paid back with cheaper dollars?….
And aligned with this question, I would like to ask something to dealing exactly with gold, is that: If paper money — today it seems to be working rather well — but if the paper system doesn’t work, when will the time come? What will the signs be that we should reconsider gold? Even in 1981, when you came before the Gold Commission, people were frightened about what was happening — and that’s not too many years ago. And you testified that it might not be a bad idea to back our government bonds with gold in order to bring down interest rates. So what are the conditions that might exist for the central bankers of the world to reconsider gold? We do know that they haven’t given up on gold. They haven’t gotten rid of their gold. They’re holding it there for some reason. So what’s the purpose of the gold if it isn’t with the idea that some day they might need it? They don’t hold lead or pork bellies. They hold gold. So what are the conditions that you might anticipate when the world may reconsider gold?
Given the fact that this was probably the last shot you’d have to put a question to Alan, the Fed Chairman these past 18 years, Ron, this was a great question. And to tell you the truth, I was shocked by Greenspan’s answer: …