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Gold=Money? Bernanke No, Greenspan Yes

Dateline August 25, 2011

Former Federal Reserve boss Alan Greenspan made headlines this week when he said gold is indeed a currency and noted that the euro was falling apart, contradicting top officials on both sides of the Atlantic.

“Gold, unlike all other commodities, is a currency,” he told attendees at a conference in Washington D.C. on August 23, saying he did not think the precious metal was in a bubble despite recently reaching a new record above $1900. And a flight to safety amid inflation fears is what’s causing soaring gold prices.

But Greenspan’s comments on gold — widely accepted among economists — fly in the face of recent statements made by current Fed chief Ben Bernanke. In mid-July, Congressman Ron Paul (R-Texas), the chairman of the House Subcommittee on Monetary Policy, asked Bernanke whether he thought gold is money.

“No,” Bernanke promptly responded, claiming that central banks held gold because of “tradition.”

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