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Mr. Greenspan, Pray Tell, Why?

October 6, 2000

To be sure we are all sick and tired of many bankers and stock brokers belittling all types of gold investments. Long years of nothing more than platitudes, cliches and glib sayings. They carp and harp that gold is dead - that it is a "barbarous relic."

Be this REALLY the case, why do they carryon so about it? Why are they so vehemently decrying the importance of gold? Surely something that has lost all value and importance is not worth talking about anymore. Why do some bankers and all stock brokers obsessively dwell upon the theme that gold is a "barbarous relic?"

And much more importantly, why has the most important financial man in this century made it a point to publicly state Central Bankers will not allow the price of gold to rise?

"Nor can private counterparts restrict supplies of gold,
another commodity whose derivatives are often traded
over-the-counter, where central banks stand ready to
lease gold in increasing quantities should the price rise."

For months a burning question has been circling the windmills of my mind. WHY is the Chairman of the U.S. Federal Reserve Bank, Mr. Alan Greenspan so deathly afraid the price of gold might rise? What would be the consequences if gold were allowed to trade freely in the market place? That is to say the price of gold would be determined by normal market forces of supply/demand dynamics. Why are "central banks standing ready to lease gold in increasing quantities should the price rise?"

If the gold price rises to $1,000/oz, will that upset someone's political apple-cart? Will it deter or diminish someone's 'AGENDA?' Will it put an end to the IRRATIONAL EXUBERANCE in Wall Street? Will it terminate more than 20-years slide in commodity prices? Will it mercifully find closure to the U.S. Farmers' plight, which threatens foreclosure on their arduous years of sweat and sacrifice? Will it end the U.S. government's ability to literally print money by issuing U.S. Treasury bonds, and subsequently pawning the 'paper' off on naïve international investors (which includes American investors)? Will it end this Ponzi Scheme of paying interest and redemption with never ending issues of more bonds, but in succeeding greater quantities?

Why is Fed Czar Greenspan so vehemently adamant that "central banks stand ready to lease gold in increasing quantities should the price rise?" I consider myself a reasonably intelligent man, and will always listen to logic to hopefully arrive at an objective conclusion. But I am missing something.

Mr. Greenspan, Pray Tell, WHY?

Should any of GOLD-EAGLE's readership know the Fed Czar's rationale for his messianic zeal of holding down the gold price, indeed defying the free market forces of supply/demand dynamics, PLEASE show me WHY. Enlighten this poor ignorant soul.

If that question is too complex to comprehend an answer, perhaps we might look at it from another angle. What might happen in the world of economics, finance and politics IF INDEED THE GOLD PRICE responding to the FREE market forces of supply/demand dynamics rose to $1,000 per ounce?

If we can answer this, we will know whence the Fed Czar comes. We will know Alan Greenspan's motivation - or at least the motivation of those who pull his strings. I say this in this way NOT out of disrespect to the Fed Czar. I see Mr. Greenspan as a man doing a job. An employee who has superiors, who have given him goals and a game plan. HOWEVER, Mr. Greenspan's intellectually brilliant treatises on gold during the past three decades are known to most well versed on the subject. There cannot be one iota of doubt where he stands personally regarding what some call the "barbarous relic."

In light of Greenspan's historic reverence of the Gold Standard vis-à-vis his current belligerent stance against gold, the Fed Czar is a modern day "riddle wrapped in a mystery inside an enigma."

A one-ounce gold nugget is rarer than a five-carat diamond.
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