Wednesday, July 14, 2004

A Primer - Part VI

Who is John Galt?

The Chairman of the Federal Reserve is Alan Greenspan...arguably the single most powerful man on the planet as he directs the monetary policy of the United States. Historically, the official reserve currency throughout the world has been gold since most if not all countries settled their trade accounts with gold. In other words, if country "A" imported more goods from country "B" than it exported, then country "A" paid the balance to country "B" in gold.

Unfortunately, as I mentioned in a previous post, President Nixon terminated the Bretton Woods Agreement by reneging on the redeemability of dollars for gold in 1971.

Today, countries have accumulated huge numbers of dollars with which to settle their trade accounts but the dollar is reaching the end of its time line. As Voltaire said: "Paper money eventually returns to its intrinsic value - zero."

Visit Gold and Economic Freedom to see what Mr. Greenspan thought of gold and those who print paper money. Given Mr. Greenspan's eloquent dissertation on the subject, I can only see two possible conclusions, either Mr. Greenspan has sold out and become one of the very statists he railed against in his now famous speech at the link above or he sees himself as Ayn Rand's hero, John Galt, who's mission it was to stop the economic engine of the world and thereby forcing everyone to come to their senses.

Time may tell.