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Why Greenspan, gold bulls and looking down on legal tender?

Greenspan said easing the Federal Reserve and the European Central Bank's balance sheet will lead to chaos.

Greenspan that confusion would cause gold prices to rise, because gold is the first currency.

history points out the inherent monetary gold property. Today's central bankers also believe that gold is money.

during the discussion, Greenspan has spent a lot of time to describe the unprecedented Central Bank balance sheets and excess Bank reserves. He thinks the future is to maintain that level, raise the fed to pay interest on reserves. He issued an ominous hint that, to keep the currency in circulation in the economy may not be the control of the Fed's policy initiatives, but decided by the Bank's required rate of return.

Greenspan also emphasized the high degree of market and constant fear. He thinks the market has the largest level of worry, spreads reached anomalous levels during the financial crisis. This fear led investors to seek safe-haven, to avoid long-term investments. Overall, Greenspan appeared to suggest that, although quantitative easing on the risk curve smoothing is successful, but now returns and the actual appetite for risk premiums are out of balance.

Greenspan was asked whether the normalization of monetary policy can be to resolve unprecedented and unusual rates of the balance sheet. His answer is impossible without turmoil. Is the evidence that will lead to unrest, he cited first to phase out quantitative easing policy, "and first discussions on phasing out quantitative easing raises very strong market response, know that fading QE although the size of its balance sheet growth slowing, but is still on the increase. "Just discussing the issue of balance sheet growth to be slowing caused the market to collapse.

funny thing is, when they are asked about the trend of gold in a volatile environment, Greenspan seemed to open the conversation. He pointed out that on the turbulence will be reflected in the price of gold.

he pointed out that all the evidence shows that gold is still the first currency, there is no legal tender including the US dollar, can match.

but gold has a currency attribute. This mechanism was not created by human beings. I don't think this is anything you can think of a mechanism, but it does run like a currency.

Greenspan told some stories about gold. After the end of World War II, Germany imported goods cannot be without gold for payment. "Delivery of goods would have a gold, but not with reputable support behind it. This is a very rare phenomenon. "

Greenspan stressed that today we can still see the rare phenomenon. Recently the fourth European Central Bank Gold Agreement reflects this. Central banks agreed that "gold is still an important element of global monetary reserves; they do not have any plan to sell large amounts of gold. "

bankers further proved has gold of value, Greenspan cited has Breton forest Conference of example," in 1944 of Washington mountain hotel of Conference debate, Cairns advocates established a by multi management of world statutory currency, he at in Conference site, and torrent of tells he of theory, but no can refuted of facts is, dollars can exchange into gold, this is on people most main of attraction. Everyone wants to be United States of gold. "

he said if you want to use the turmoil in future profits could be considered United States gold mining stocks and gold ETF Fund.

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