“In reality, all Greenspan’s alleged mystery revealed was an implicit acknowledgement on his part that he too lacked a clue about the future. And since he didn’t have a clue, better to give off an air of mystery than to speak clearly only for market realities to reveal one’s clarity as wholly detached from reality. Put another way, if there was a genius within Greenspan it was rooted in his knowledge of how little he knew.”
USAGOLD note: Perhaps better put, Greenspan’s genius was in hiding how little he could control. And that, in turn, may be why he has always been an advocate of gold as the final means of payment and ultimate asset of last resort. This piece and the one linked below after the quote from Peter Fischer provide much food for thought about the Fed’s role in past economies with enough inference to its role now to make things interesting.
“Indeed, the contradictions and tensions within [Sebastian] Mallaby’s Greenspan are what make this a great portrait. Greenspan the business consultant is both a data-driven pragmatist and a devotee of Ayn Rand and her radical laissez-faire philosophy. He is the young man who thought that the creation of the Fed was a historic mistake and the older man who became the Fed’s maestro. He is ‘the man who knew’— knew the facts, knew the analysis and ultimately knew that central banks had to lean against asset bubbles. He is also the man who knew what he did not know, who—at the height of his powers and perhaps because of those powers—was comfortable admitting that ‘we really do not know’ how the monetary system works.” – Peter R. Fisher, Dartmouth, The many lessons of ‘The Man Who Knew’, 2016