Let's Bury Greenspan, Not
February 3, 2006
This week, Alan Greenspan bids a long overdue farewell to the
Federal Reserve that he chaired for eighteen years. Praise from
his Washington and Wall Street beneficiaries has naturally arrived
by the boatload. His monetary policies enabled reckless and seemingly
consequence-free deficit spending, helping incumbent politicians
repeatedly win re-election; and his expansion of money supply
and credit facilitated non-productive financial transactions,
all to the benefit of the bankers who arranged them. It should
be surprising to no one that he is so popular among these groups.
The fact that Greenspan is so highly regarded by politicians
and investment bankers is not a sign of how well he did his job
however, but of how poorly.
Helping to win elections and fund bonuses comes with consequences,
in this case an unbalanced U.S. economy teetering on the brink
of economic disaster. During Greenspan's tenure America was transformed
from the world's largest creditor to its greatest debtor, from
the world's mightiest industrial power to a second rate service
provider, and from a nation of responsible savers to one of reckless
spenders. Self-sacrifice has been replaced by self indulgence,
hard work by paper pushing, and genuine productivity by accounting
In effect, Greenspan helped Americans squander the "mother
of all" inheritances. As any philandering playboy can attest,
the process is easy and extremely enjoyable. However, it's not
something worth bragging about. By focusing on consumption and
asset prices, while ignoring debt, production and legitimate
wealth creation, the Greenspan era was confused with one of genuine
prosperity. To quote the great Ludwig Von Mises, "It may
sometimes be expedient for a man to heat the stove with his furniture.
But he should not delude himself by believing that he has discovered
a wonderful new method of heating his premises."
As evidence of his mastery, Greenspan boosters point to what
they call the "longest economic expansion in U.S. history,"
and to his seeming dexterity in dealing with financial crises.
In fact, the only thing Greenspan succeeded in doing was delaying
the inevitable. By blowing more air into every bubble he encountered,
Greenspan succeeded largely by giving himself enough time to
get out of Dodge before things got dicey. His long overdue departure
would be an event worth celebrating, were it not for the fact
that he is being succeeded by someone who may well be even more
While the Greenspan Fed was certainly good for bankers and politicians,
it was a disaster for the rest of America. In his wake, the long
term solvency of America's economy, its financial institutions,
and most importantly, the integrity of its currency, all teeter
on the brink. Rather than being a maestro, think of Greenspan
as the Pied Piper, who led Americans down a path to financial
ruin. We all had a blast as the deceptively pleasing tune reverberated
in our heads, but reality will set in when the music finally
Do not wait for the music to
stop playing. Protect your wealth and preserve your purchasing
power before it's too late. Start by downloading my free research
report on the coming collapse of the U.S. dollar at www.researchreportone.com
and subscribing to my free, on-line investment newsletter at:
February 2, 2006
C.E.O. and Chief Global Strategist
Euro Pacific Capital, Inc.
Mr. Schiff is one of
the few non-biased investment advisors (not committed solely to
the short side of the market) to have correctly called the current
bear market before it began and to have positioned his clients
accordingly. As a result of his accurate forecasts on the U.S.
stock market, commodities, gold and the dollar, he is becoming
increasingly more renowned. He has been quoted in many of the
nation's leading newspapers, including The Wall Street Journal,
Barron's, Investor's Business Daily, The Financial Times, The
New York Times, The Los Angeles Times, The Washington Post, The
Chicago Tribune, The Dallas Morning News, The Miami Herald, The
San Francisco Chronicle, The Atlanta Journal-Constitution, The
Arizona Republic, The Philadelphia Inquirer, and the Christian
Science Monitor, and has appeared on CNBC, CNNfn., and Bloomberg.
In addition, his views are frequently quoted locally in the Orange
Mr. Schiff began his investment career as a financial consultant
with Shearson Lehman Brothers, after having earned a degree in
finance and accounting from U.C. Berkley in 1987. A financial
professional for seventeen years he joined Euro Pacific
in 1996 and has served as its President since January 2000. An
expert on money, economic theory, and international investing,
he is a highly recommended broker by many of the nation's financial
newsletters and advisory services.