Dear Friend of Radio Liberty,
"Well, while I was aware a lot these practices were going on, I had no notion of how significant they had become until very late. I didn't really get it until very late in 2005 or 2006."
Alan Greenspan, CBS, 60 Minutes, Sept. 16, 2007 
"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. . . . The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves."
Alan Greenspan, "Gold and Economic Freedom," 1966 
"Since we went on a total paper standard in 1971, we have increased our money supply essentially 12-fold. Debt in this country, federal debt, has gone up 19-fold, but that is in nominal dollars, not in real dollars. . . . So my question is this: Is it not true that the paper system that we work with today is actually a scheme to default on our debt?"
Congressman Ron Paul, question to Alan Greenspan, July 20, 2005 
"Since the late '70s, central bankers generally have behaved as though we were on the gold standard . . . the extent of liquidity contraction that has occurred as a consequence of the various different efforts on the part of monetary authorities is a clear indication that we recognize that excess creation of liquidity creates inflation which, in turn, undermines economic growth."
Alan Greenspan's response, July 20, 2005 
The unfolding collateralized debt obligation crisis (CDO crisis) has triggered an inflationary spiral that is undermining the stability of our economy, destroying the value of our currency, and threatening the financial structure of the world. Who is responsible for this disastrous situation?
* The people who purchased homes they couldn't afford?
* The real estate agents who sold homes to millions of unqualified buyers?
* The banks and mortgage brokers that lent money to unqualified home buyers?
* The banks and lending institutions that bundled the subprime loans into bonds?
* The financial institutions that rated the subprime housing bonds?
* The financial institutions that purchased the defective bonds?
Each of the groups is partly responsible for the disastrous situation, but the man who is primarily responsible is Alan Greenspan because he created the inflationary spiral that led to the sub-prime mortgage crisis that threatens the stability of financial institutions throughout the world today. What happened? When Alan Greenspan was Chairman of the Federal Reserve System, he lowered the Fed's overnight lending rate to 1%, increased the money supply (M1, M2, and M3), overstimulated the economy, and encouraged unqualified people to purchase homes they couldn't afford.
Did Alan Greenspan understand the disastrous consequences of his policies? I believe he did, and Lesley Stahl's September 16, 2007, 60 Minutes interview with the former Chairman of the Federal Reserve confirms my opinion.
Lesley Stahl: "If you knew these practices were going on and even maybe just suspected that there was something illegal or shady, why didn't you speak out?" 
Alan Greenspan: "Well, while I was aware a lot these practices were going on, I had no notion of how significant they had become until very late. I didn't really get it until very late in 2005 or 2006."
At that point, Lesley Stahl knew that Alan Greenspan was lying because she had read the minutes of some of the Fed meetings, and knew that other members of the Board of Governors were concerned about the fraudulent practices that were being used to sell homes.
Lesley Stahl: "But others at the Fed did get it, that banks and mortgage companies had already signed up millions of home buyers and speculators, many with poor credit, for so-called subprime mortgages with complicated interest rate adjustments that have led to record numbers of defaults. Some of the practices were fraudulent. One of your former Fed governors, Ed Gramlich, said that he proposed that the Fed examine these lending practices and look into them to see if something could be done and that you rejected that idea."
Mr. Greenspan: "Well I thought. . . ."
Lesley Stahl: "Why did you reject it?"
Alan Greenspan lost his composure, and stammered:
"I thought that it - one would not be - we would not be capable of doing what he was suggesting."
Lesley Stahl: "What? Of sitting on them, taking some regula - what?"
Alan Greenspan interrupted Lesley, and stated:
"Well, I think not."
Lesley Stahl: "Even if you even looked into it?"
Alan Greenspan: "Well, I - it's nothing to look into, particularly, because we knew that there was a number of such practices going on. But it's very difficult for banking regulators to deal with that." 
Edward Gramlich wanted to investigate the fraudulent practices that were being used to sell homes in 2000, but Alan Greenspan opposed that idea. You can access the minutes of one of the Fed meetings that Edward Gramlich chaired at:
When Lesley Stahl asked Alan Greenspan for his opinion of the condition of the U.S. stock market, he didn't answer her question, so she asked how he was investing the $8 million he received for writing his book, The Age of Turbulence:
Lesley Stahl: "Well, if you could be paid in any currency . . . in the whole world, what would you like to be paid in?"
That was a very important question because the major goal of the Federal Reserve System is to insure the stability of the U.S. dollar. Did Alan Greenspan preserve the value of the American dollar when he was Chairman of the Fed?
Alan Greenspan: "Well, as an economist, I would say I couldn't care less, because I could immediately convert it in the exchange markets to whatever currency. . . . "
Lesley Stahl: "So it doesn't matter?"
Alan Greenspan: "No."
Lesley Stahl: "Euros, dollars, dinars. It's all the same to you?"
Alan Greenspan: "Key question, basically, is in what currency do you wish to hold your assets. . . . And what I've done . . . is I diversify." 
It was obvious that Alan Greenspan has invested part of his $8 million in other currencies, or fixed assets, because he doesn't trust the U.S. dollar. Why doesn't he trust the dollar? Because Alan Greenspan destroyed the value of our currency, and undermined the financial stability of our nation.
* When Alan Greenspan became Chairman of the Federal Reserve Board in August 1987, the Federal debt was $2.350 trillion. The official Federal debt today is almost $9 trillion. David Walker, the Comptroller General of the U.S., claims the Federal debt will increase to $50 Trillion during the next 20 years, and bankrupt our nation. 
* When Alan Greenspan became Chairman of the Fed in August 1987, the U.S. Stock Market (Dow Jones average) was 2,700. The stock market is over 14,000 today. 
* When Alan Greenspan became Chairman of the Fed in August 1987, inflation was 3.6%. Independent analysts claim inflation is 11% today. 
* When Alan Greenspan became Chairman of the Fed in August 1987, the American dollar was the reserve currency of the world. The dollar lost almost 40% of its value in relationship to the EURO between 2002 and 2005, and many nations are trying to divest their dollar holdings today. 
Why is the value of the U.S. dollar falling? It's falling because Alan Greenspan, and the other central bankers, flooded the world with fiat currency, and precipitated the financial crisis that threatens our nation today. Did Alan Greenspan understand the inherent danger of increasing the fiat money supply? Certainly. He wrote an essay on that subject in 1966 that stated:
"In the absence of the gold standard, there is no way to protect savings from confiscation
through inflation. There is no safe store of value. If there were, the government would
have to make its holding illegal, as was done in the case of gold. . . . The financial policy
of the welfare state requires that there be no way for the owners of wealth to protect
themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit
spending is simply a scheme for the confiscation of wealth." 
If Alan Greenspan had limited the expansion of the money supply (M1, M2, and M3) to 1%-2% a year, there would have been 1% - 2% inflation, and the fiat monetary system would have survived. Instead, Alan Greenspan increased the money supply 5% - 10% a year, lowered interest rates, encouraged the use of credit, supported irresponsible tax cuts, and stimulated the excessive investment that produced the rampant inflation we are witnessing today. You can confirm the rate of increase in the money supply by going to Google, and typing in "Federal reserve money stock." That will take you to the "monetary stock report" where you can access the figures that are recorded below. However, before you do that, you must understand the meaning of the terms M1, M2 and M3. According to the Fed:
"M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at commercial banks...." etc. M1 reflects the currency in circulation that is readily accessed. If you read the definition of M1, M2, and M3 from year to year, you will find the Fed changes the wording which makes it difficult to determine what the Fed is doing.
"M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small denomination time deposits in amounts of less than $100,000, less individual retirement account (IRA) and Keogh balances at depository institutions," . . . etc. . . M2 reflects the money deposited in banks and other financial institutions that is not readily available.
"M3 consists of M2 plus (1) balances in institutional money market mutual funds; (2) large-denomination time deposits in amounts of $100,000 or more, (3) repurchase agreement (RP) liabilities of depository institutions, . . . and (4) Eurodollars held by U.S. addressees at foreign banks worldwide and at all banking offices in the United Kingdom and Canada." M3 reflects the total amount of U.S. money and credit in the world. 
The Fed stopped publishing M3 in 2005 because they don't want the public to understand what is taking place. 
The following figures reflect the increase in M2 and M3 during the proceeding 12 months. Note the increase of M3 between 1999 and 2002 that fueled the housing bubble.
March 1999: M2: 8.0% , M3: 9.2%
March 2000: M2: 5.7%, M3: 8.3%
March 2001: M2: 8.1%, M3: 9.6%
March 2002: M2: 8.4%, M3: 10.0%
March 2003: M2: 7.2%, M3: 6.4%
March 2004: M2: 4.5%, M3: 4.5%
March 2005: M2: 4.9%, M3: 4.8%
April 2006: M2: 4.7%, The Fed stopped publishing M3
March 2007: M2: 6.1% www.shadowgovernmentstatistics.com calculates the true rate of inflation. In May 2007 the CPI (M2) was 6%, M3 was almost 13%.
August 2007: M2: 6.7% 
Congressman Ron Paul tried to expose the organized effort to destroy the value of our currency when Alan Greenspan appeared before the House Banking Committee on July 20, 2005. Congressman Paul's and Alan Greenspan's remarks are printed in bold type; my remarks are printed in italics.
Congressman Ron Paul: "But, since we went on a total paper standard in 1971, we have increased our money supply essentially 12-fold. Debt in this country, federal debt, has gone up 19-fold but that is in nominal dollars, not in real dollars. So my question is this: Is it not true that the paper system that we work with today is actually a scheme to default on our debt? And is it not true that, for this reason, that's a good argument for people not eventually, at some day wanting to buy Treasury bills because they will be paid back with cheaper dollars?" 
Alan Greenspan knows that every fiat money system that has ever been established has failed because government officials expanded the money supply, destroyed the value of the currency, and produced rampant inflation. Alan Greenspan also knows that the only way to maintain a fiat monetary system is to restrict the supply of money.
Congressman Ron Paul: "And, indeed, in our lifetime, we certainly experienced this in the late 1970s that interest rates had to go up pretty high and that this paper system serves the interests of big government and deficit financing because it's a sneaky way of paying for it.
At the same time, it hurts the people who are retired and put their money in savings." 
President Johnson financed the Vietnam War by stealing money from Social Security and Medicare, and increasing the supply of fiat money. The inflationary spiral that followed forced President Nixon to take the U.S. off the gold standard on August 15, 1971, but that didn't solve the problem. Inflation rose to 11% in 1979, and 15% in 1980. When Paul Volcker became Chairman of the Fed in 1979 and evaluated the inflation rate, he contracted the money supply, limited credit, and raised the interest rate to over 20% to stabilize the American dollar. 
At that point Congressman Ron Paul asked Alan Greenspan about the possibility of returning to a gold- backed currency.
Congressman Ron Paul: "And aligned with this question, I would like to ask something . . . dealing with gold . . . paper money . . . seems to be working rather well but if the paper system doesn't work, when will the time come? What will the signs be that we should reconsider gold? Even in 1981, when you came before the Gold Commission, people were frightened about what was happening and that's not too many years ago. And you testified that it might not be a bad idea to back our government bonds with gold in order to bring down interest rates. So what are the conditions that might exist for the central bankers of the world to reconsider gold? We do know that they haven't given up on gold. They haven't gotten rid of their gold. They're holding it there for some reason. So what's the purpose of the gold if it isn't with the idea that some day they might need it? They don't hold lead or pork bellies. They hold gold. So what are the conditions that you might anticipate when the world may reconsider gold?" 
The Founding Fathers wanted the U.S. to have a gold-backed currency because they wanted the American people to remain free, but the wealthy men who controlled the European banks at that time wanted to establish a Central Bank in the United States so they could control the American economy and the American people. That was the basis of the debate that took place between Alexander Hamilton and Thomas Jefferson in 1790, and that was the basis of the debate that took place between Congressman Ron Paul and Alan Greenspan on July 20, 2005. 
Alan Greenspan: "Well, you say central banks own gold or monetary authorities own gold. The United States is a large gold holder. And you have to ask yourself: Why do we hold gold? And the answer is essentially, implicitly, the one that you've raised namely that, over the generations, when fiat monies arose and, indeed, created the type of problems which I think you correctly identify of the 1970s, although the implication that it was some scheme or conspiracy gives it a much more conscious focus than actually, as I recall, it was occurring. It was more inadvertence that created the basic problems." 
That is a classic example of the technique that Alan Greenspan used to avoid answering questions. Alan Greenspan placed Congressman Paul in a defensive position by suggesting he believed there was a "scheme or conspiracy". When Lesley Stahl accused Alan Greenspan of trying to confuse the media, he proclaimed: "I succeeded, I succeeded." 
Alan Greenspan: "But as I've testified here before to a similar question, central bankers began to realize in the late 1970s how deleterious a factor the inflation was. And, indeed, since the late '70s, central bankers generally have behaved as though we were on the gold standard. And, indeed, the extent of liquidity contraction that has occurred as a consequence of the various different efforts on the part of monetary authorities is a clear indication that we recognize that excessive creation of liquidity creates inflation which, in turn, undermines economic growth." 
None of the members of the House Banking Committee, with the possible exception of Congressman Ron Paul, were aware of the fact that Alan Greenspan, and the other central bankers, had increased the supply of fiat money, and were trying to destroy the world monetary system.
I will complete this commentary next month, and explain why the coming financial crisis may be a blessing.
Everything points to the fact that the Bush administration is trying to find an excuse to attack Iran. Please pray that President Bush doesn't plunge our nation into a genocidal war with the Moslem world.
Many ministries face financial shortfalls at this time of year, and Radio Liberty is no exception. If you can help, please do. We must continue our effort to tell the American people about the spiritual forces that are trying to destroy our nation because:
". . . we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places." 
What can we do? We can remember the powerful words of a wonderful hymn that was sung in American churches many years ago:
"Onward, Christian soldiers! Marching as to war,
With the cross of Jesus Going on before.
Christ, the royal Master, Leads against the foe;
Forward into battle, See His banners go!
Onward Christian soldiers, Marching as to war,
With the cross of Jesus Going on before." 
Why isn't that hymn sung in American churches today?
Barbara and I appreciate your prayers, and your faithful support.
Yours in Christ,
1. Burrelle transcript, CBS News, 60 Minutes, September 16, 2007, p. 2.
2. www.321gold.com/fed/greenspan/1966.html p. 4.
3. www.usagold.com/gildedopinion/greenspan-gold.html p. 26.
5. Burrelle transcript, op. cit.
8. Burrelle transcript, op, cit., p. 4.
See Also: www.cnn.com/2007/US/03/28/federal.debt/
10. Alan Greenspan, The Age of Turbulence, The Penguin Press, New York, 2007, p. 102.
11. Ibid., See Also: Bob Chapman: The International Forecaster, Sept. 19, 2007, p. 8.
See Also: www.firstnationalbullion.com/usdollar.html
13. www.321gold op. cit.
16. www.federalreserve.gov/releases/h6/19990506/ and subsequent years
17. www.usagold op. cit.
19. Alan Greenspan, op. cit., pp. 84-86.
20. www.usagold op. cit.
21. Stanley Monteith, "A History of Money," Available from Radio Liberty.
22. www.usagold op. cit.
23. Burelle transcript, op. cit., p. 10.
24. www.usagold op. cit.
25. Holy Bible, King James version, Ephesians 6:12
26. Charles Johnson, One Hundred & One Famous Hymns, Hallberg Publishing Corporation, Delavan, Wisconsin, 1982, p. 81.
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