Former Federal Reserve chairman Alan Greenspan gave a downright endorsement of gold as an unmatched currency during a talk at the Council on Foreign Relations. We added the (2014) tag because many have looked at Mr Greenspan's early missives and believed that he was a gold bug. But as is often the case with high ranking officials and public servants, what they do during their terms in office does not always reflect their (previous) views. And they often have their own versions of "Come to Jesus" moments AFTER they leave office and are suddenly able to see the light. Make what you may of this CFR sponsored discussion with Alan Greenspan.
"GREENSPAN: No, I think that -- remember, we had that first tapering discussion, we got a very strong market response. And then we reassured everybody to have no -- remember, tapering is still (audio gap) of an agreement that the central banks have made -- European central banks, I believe -- about allocating their gold sales which occurred when gold prices were falling down (audio gap) has been renewed this year with a statement that gold serves a very important place in monetary reserves.
And the question is, why do central banks put money into an asset which has no rate of return, but cost of storage and insurance and everything else like that, why are they doing that? If you look at the data with a very few exceptions, all of the developed countries have gold reserves. Why?
TETT: I imagine right now, it's because of a question mark hanging over the value of fiat currency, the credibility going forward.
GREENSPAN: Well, that's what I'm getting at. Every time you get some really serious questions, the 50 percent of the gold price determination begins to move.
Audio and a transcript of the full talk are available from the CFR.