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Monday, 11th May 2009 (1266 views)

An investment specialist has reinterpreted a seminal 1966 essay by former US Federal Reserve chairman Alan Greenspan to reflect contemporary gold markets.

According to JS Kim, writing on SeekingAlpha, Mr Greenspan "once made the timeless statement that economic freedom and gold are inseparable" and he stated that a true gold standard could be introduced to back federal reserves and keep money "honest".

Based on Mr Greenspan's 1966 work entitled Gold and Economic Freedom, Mr Kim's analysis suggested that the current financial markets crisis would not have materialised under a true gold standard.

According to the investment expert, banking dollars with gold would help to prevent economic bubbles from developing and bursting.

"A gold standard automatically regulates monetary supply and monetary strength," he said, adding that it is the flexibility and durability of gold as a commodity that makes it useful as money.

In other news, precious metals specialist Larry Edelson described gold in a recent article for Uncommon Wisdom, a newsletter from Weiss Research analysts, as the "most important" investment that people can make during the current economic downturn.

 

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