The Age of Turbulence, Engineered
Bruce Collins
October 29, 2007
In August, Alan Greenspan’s memoirs, titled “The Age of Turbulence: Adventures In A New World”, debuted with plenty of media fanfare. Greenspan hit the interview circuit with a passion, appearing on financial networks, major talk shows and news magazines.
It was oddly like the hoopla that networks display when the cast of a formerly beloved television show reunite- our old pal Alan was back without missing a beat.
To Greenspan, his penned masterpiece was an explanation of his two decades at the Federal Reserve and his views of future economic trends. To others, it was a heavy handed justification for Central Bank manipulation.
The interesting thing about “The Age of Turbulence” is that almost none of the media yet acknowledges that the turbulence belongs, in large part, to Alan Greenspan, the US government and the Federal Reserve.
There are certain turbulent events in nature and human action that happen on a regular basis that no economic guru can foresee or modify. However, economic ‘turbulence’, although largely ignored in the media, has almost exclusively been influenced.
Years ago, Alan Greenspan was an associate of philosopher Ayn Rand, forming a twenty year relationship. While Rand was no proponent of religion, she was against the evils of collectivism, opting for individual rights instead. Rand had her faults, in my opinion, because she did not understand that God-given rights also require God-given responsibilities, such as charity and service.
Nonetheless, through Rand, Greenspan understood the dangers of a collective thought process running concurrently within media, government and the cultural elites.
Greenspan even understood the value of a currency being tied to a gold standard. He wrote of the dangers of inflation (which occurs when the Federal Reserve prints money that is not tied to a tangible asset such as gold) in 1966. In July 2000, he admitted to his "having actually attended a seminar of Ludwig von Mises" in the 1960s and also admitted that many of the concepts developed by Austrian economics and Von Mises “still are all right."
Yet, when he became the Federal Reserve Chairman, he seemingly abandoned all good sense about economics.
During the Greenspan era, booms and busts were orchestrated every few years. One after another bubble occurred with the Fed Chairman usually “unaware” that we were in the midst of another “irrational exuberance.”
The latest Fed orchestrated mess is the housing bust and dollar collapse. Again, Greenspan, just shy of retirement, was not warning the masses of the latent danger.
A man, well versed in Austrian economics and a protégé of Ayn Rand, did not seem to understand the potential catastrophe of another fiat currency debacle. This was also a man who understood the dangers of collectivism.
What went wrong?
Perhaps Ms. Rand’s biography gives us a clue.
"Do you think Alan might basically be a social climber?" Rand once asked a mutual shared contact.
Alan Greenspan joined the collective.
It was Alan Greenspan who, in later years, decided that gold was merely a “barbarous relic” and not relevant to the ‘new world.’ It was Greenspan who threw away his belief in individualism and Austrian economics and opted for the socialist, and widely accepted, Keynesian view of economics.
It was Greenspan who was admired by the media, called “The Maestro” by Bob Woodward, all the while allowing the US dollar to careen out of control.
It was the Alan Greenspan Federal Reserve that walked hand in hand by printing money in pace with big government deficit spending of the last twenty years.
In 2003, during the peak of a bubble that was obviously going to burst, Alan Greenspan spoke something so absurd, it must have been a ploy to either bankrupt the middle class or keep the economy going. I’ll let the reader decide.
The details brilliantly retold from an article titled, “There Goes The Neighborhood” by Benjamin Wallace-Wells:
“One of these spells flared up during the last week in February, when Greenspan recommended that the home-owning public take a good hard look at switching from fixed-rate mortgages, under whose terms payments stay the same no matter what interest rates do, to adjustable rate mortgages (ARMs), where payments fluctuate along with interest rates--which, right now, makes close to zero sense. Interest rates are lower than they've been in 30 years, and, with all economists predicting a general economic upturn, and Bush's budget deficit and the weak dollar sucking up capital, little doubt exists that interest rates must rise, in which case, switching from a fixed-rate to adjustable-rate mortgage would be pretty costly for any family naïve enough to take Greenspan at his word. The episode did not pass completely without critical notice. It was "the strangest bit of advice ever to be proffered by an American central banker," Jim Grant, publisher of Grant's Interest Rate Observer, told the San Francisco Chronicle. Then the press moved on: "Oh, it's just Greenspan."
“But sometimes wacko ideas can betray deeper truths. It is tempting to ask what stake the chairman might have in trying to convince millions of people to do something so contrary to their own interest. “
Now, this episode is even more interesting when you consider that by 2005, Greenspan was warning of a house price crash. His wish came true.
Yes, we are in an age of turbulence, but much of it created by our Central Banking system. One must ask, why would smart economists do such dumb things?
I think Glenn Beck, the highly popular CNN host, is on to something. Paraphrasing, Glenn said recently,” At the risk of sounding like Ron Paul, I believe that the government is on a course to hyperinflate our currency so that they can introduce the Amero in a few years.”
I’m happy to see a national personality get it (even if they may not fully get it). We are on a course, thanks to the elites such as Mr. Greenspan, to blur our borders with Canada and Mexico and we are on a course to collapse our dollar to introduce this new currency.
I only know of one candidate running for President who seems to get it. I only know one candidate who understands the principle of sound money and Austrian economics. I am only aware of one Presidential entrant who knows how close we are to Martial Law and totalitarian government. Only one, if elected, has pledged to do away with the socialist Federal Reserve system.
That’s Ron Paul.
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