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Fearing that cataclysmic hyperinflation could occur at any moment, Alan Greenspan, former Chairman of the United States Federal Reserve, urges a return to sound money, specifically the gold standard. Bitcoin does the trick too.
According to Alan Greenspan, Former Chairman of the Federal Reserve, the United States should revert to the gold standard in order to counter inflation.
In a 36-minute interview for Bloomberg, Greenspan outlined how he believes that the current global financial situation, triggered by the United Kingdom’s exit from the European Union, is worse than any he has seen during his long career, and that hyperinflation could be imminent.
“If you look at human history, there are times where we thought that there was no inflation and everything was going fine… The oil prices have had a terrific impact on global inflation and would not be surprised to see the next unexpected move to be on the inflation side. You don’t have it until it happens.”
As a safeguard against inflation and financial catastrophe, Greenspan proposes a more stable form of currency than fiat money, such as a return to the gold standard.
“Now if we went back on the gold standard and we adhered to the actual structure of the gold standard as it exists let’s say, prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard.”
During the period where the United States adopted the gold standard, the dollar’s value remained far more stable. Over the last 100 years, from the founding of the Federal Reserve and later the complete dissolution of the gold standard, the dollar has lost 90% of its value.
Meanwhile, Bitcoin remains an alternative to the dollar without similar setbacks. Much like gold, Bitcoin acts as a stable hedge against uncertain times, rising in value as faith in prevailing economic systems falls. Additionally, the supply is limited. Since the second block reward halving, new coins will come into circulation at half the previous rate. Currently, 75% of all future Bitcoins have already been mined.
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