(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.)
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…if fear is running rampant in the gold trade, it is not fear of a recession, depression, etc… Instead, it is the fear of former chairman Alan Greenspan – better yet, it is the continued accommodation of the legacy of money-printing that he brought to the Federal Reserve.
On Sunday, Greenspan spoke on NBC’s Meet the Press and cheerily reassured us that the U.S. will never default because it can always print money: “The United States can pay any debt it has because it can always print money to do that. There is zero probability of default.” This claim reminded me of the very real possibility that the U.S. may eventually be forced to monetize its debt by printing money. Moreover, Greenspan’s assignment of a “zero probability” to a major economic event displayed the dangerous blinders (hubris?) that leave any policymaker unprepared who thinks s/he can steer an entire economy.
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Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.)
Full disclosure: long GLD, GG, FXA; net long the U.S. dollar