Alan Greenspan Quotes
What a sound money system does is to stabilize all the elements in it, and reduces the uncertainty that people confront. And the one thing all human beings do when they are confronted with uncertainty is pull back, withdraw, disengage, and that means economic activity, which is really dealing with people, just goes straight down.
Greenspan, Alan. Interview by Jon Stewart. The Daily Show with Jon Stewart, Comedy Central, 23 Oct. 2013.
The sentence was actually drafted by Secretary of the Treasury Salmon Chase.
This is a remarkable quotation in that it proposed exactly what the United States did in the Nixon administration. We went off the gold standard and backed American money with the wealth and “full faith and credit” of the nation and all its assets. It has been the strongest and most sought after currency in the world despite the fact that it is not backed by gold or silver as earlier American currency was.
Most modern economists argue just the opposite. The monetary supply for a growing world population would be insufficient for growth since the supply of gold is extremely limited. The United States was plagued by this problem from its earliest times as its growth was very strong, but there was not enough gold to support the growth. So silver was added, and then during the Civil War where growth rates were very large in the North, paper currency evaded the problem, which returned over the next century until the Nixon Administration—a very conservative one—shocked many conservatives by abandoning the Gold Standard and the U. S. has never returned to it.
Alan Greenspan is an American economist who served five terms as the 13th Chair of the Federal Reserve of the United States from 1987 to 2006. He works as a private adviser and provides consulting for firms through his company, Greenspan Associates LLC. First appointed Federal Reserve chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring on January 31, 2006, after the second-longest tenure in the position (behind William McChesney Martin).
