Alan Doomspan’s
place in history
by Colin Colenso
TNA News with Commentary
Wednesday 14 February 2001
The sycophantic flattery by the Keynesian market experts over the last few
years would have us expect to see Alan Greenspan forever remembered as the
greatest economist and monetary manipulator of all time. Instead, his fate
appears to be turning in the direction Austrian economists have long
predicted. He may be remembered as being the worlds most overrated and
dangerous economist. He has obeyed the fearless cries of encouragement from
the proponents of easy credit for too long, and now it seems his boat is
heading straight for the rocks. The only question seems to be, will he decide
to add some extra fuel to his load. It seems the Federal Bank’s only strategy
in a crisis is to pump out increasingly easy credit. They would have us
believe our biggest danger would be if the printing presses could not print
fast enough. This as the regular reader knows is no solution. It only
increases the irritation. It seems possible that the US is heading for it a
severe economic adjustment and some are wondering if the US fiat currency can
survive this worsening recession. If confidence in the US dollar falls, and a
run starts on the banks, it could be sayonara for the world’s most used
currency. This might be extreme. I can only guess at the future from this
time where debt is at levels never before seen. To look at the enormity and
rapid acceleration of measures of credit pumping and money printing it is
little wonder some writers are calling Mr. Greenspan, Mr. Magoo (a blind
cartoon character, who thinks he can see). Perhaps Mr. Doomspan will be a
more appropriate moniker if my fears are realized. If huge debts in a
worsening recession weren’t enough to raise the hairs on the back of your
neck, consider some of the goings on in the derivatives market. The
derivative markets have expanded at an incredible rate over the last 6 years.
Though not the largest derivative market, the gold derivatives situation
presents some ominous figures. Gold derivatives are essentially receipts for
gold, much as our money systems used to be. These are not however under the
control of a limiting centralized system. They are then, vulnerable to the
rogue bank scenario that plagued the non-centralized banking system in the
early days of fractional reserve theft, oops, I mean policy. A prosperous
market has developed in trading these derivatives over the past few years,
and it has alarmed experts in the industry to find that total derivative
receipts created in the last 2 years far exceed total holdings of gold. The
rapid expansion of these derivatives has been exponential and makes rising
credit volumes look tame by comparison. This expansion has mostly occurred
within a few banks. An organization known as The Gold Anti-Trust Association
(GATA), has claimed that a gold price fixing swindle has been going on since
the mid 90s. They have gone so far as to launch legal proceedings against
Alan Greenspan and a host of associated big players and banks. Details are
available at www.gata.org They claim that there have been ongoing efforts by
these organizations to keep the price of gold below its true market value by
introducing ever-greater amounts of gold and gold derivatives into the market
every time a price rise occurs. The reasons for this action may include that
the Fed wants to hide the real loss in monetary value. That is, inflation.
Selling something, which costs next to nothing, has always been a catchy
business proposition for bankers and this is another reason to take
G.A.T.A.’s claims seriously. Also, there is a belief that holding prices of
gold within a narrow range keeps the speculators safe in their double up type
game of price speculation. The theory is analogous to the advantage a
roulette player gains if he knows an ‘even’ is assured at least every 5th
spin. It is also believed that the Fed is afraid that a surge in gold prices
might start a rapid run for people towards liquidity by getting their hands
on cash and then gold. Since there is not nearly enough cash, and even less
gold, things would soon get nasty. It is easy to get carried away with ideas
of gloom and doom as Y2K has clearly shown, but one cannot deny that there
are serious imbalances in the monetary system. Perhaps it will be worth the
cost if people learn from this lesson the benefits of a gold-backed currency
and the foolishness of current methods of central banking. Maybe our
ancestors will look back with some amusement at our superhero Doomspan who
created the world’s largest supply of greenback toilet paper.
