Looking back 1 - The Greenspan Standard

I am today starting a new series looking back over some six years of blogging on Ironies and Ironies Too. The following was posted on 17th September 2004 and seemed apt (linked here) as I just mentioned Greenspan's successor in the posting immediately below. The Greenspan Standard I find it interesting that the US deficit is running at eye-boggling levels of indebtedness yet the interest rate in the USA for their 10 year bond hovers around 4 per cent. I explain this to myself as having to be due to the dollar being linked to something of greater intrinsic value than itself, which I choose to explain as the Greenspan standard. Although re-confirmed in office as Chairman of the Federal Reserve for another term, eventually even Alan Greenspan must fade away - what then will underpin the free-world's economic system? I believe the chosen interviewers should perhaps pose this question to the two Presidential candidates in the upcoming televised debates. Would each of them, at some point in the future, favour a return to the Gold Standard, or perhaps tie the value of the dollar to some other precious but even rarer metal? Or will they risk it being set loose to the whims of world opinion once Greenspan is gone?