Below is an extract from a commentary available to subscribers at www.goldenbar.com on 28th September 2005.
In his role as Chairman of the nation's central bank and legal tender monopoly, therefore, Greenspan learned central banking 101 very well. In his 18-year tenure so far, the Federal Reserve expanded money M1 by 81%, M2 by 134%, and M3 by nearly 200 percent - never mind the broader categories (asset backed, etc.). He thus created the greatest stock bubble in history and in the process helped enrich Wall Street investment banks at the expense of the retail investor which has all but disappeared from the abuse; he helped the government's fiscal tentacles grow around the lungs of commerce by letting it borrow and spend the public trust into the abyss; he's made Americans dependent on cheap imports (of goods as well as savings) by perpetrating a fraud on foreign exporters; he helped fool Americans into thinking that both guns and butter are not only possible but plentiful. The value of the greenback under his reign at the Fed (since 1987) has fallen by 30 percent in terms of the CRB, almost 40 percent if you like the CPI as your barometer, and more than 60% in terms of the average US house price - which probably means that of the more than 7000 points that the Dow gained since 1987, more than half is thanks to the decline in the value of the currency in which it is denominated. Practically the only place where the effects of his policy have yet to be reflected is in the value of gold which is still about where it was when he signed on, and interest.
Thus he learned quite well how to expand money and credit with a minimal fallout in confidence... he learned well how to manage the effects of monetary expansions... by hiding or postponing them. He learned how to wield monopoly power wisely in the policy halls of Congress... how to fool or lull investors and consumers into overvaluing the Fed's notes... how to exculpate himself from his own bad policy decisions... he learned enough that he pulled off the biggest heist in the history of the world, since John Law, right under your very nose.