Alan Greenspan was the big headliner at the New Orleans Investment Conference, participating in a one-on-one interview with the MC, Gary Alexander, and then participated in a panel discussion with Porter Stansberry and Dr. Marc Faber. Mr. Greenspan made some very important points which has been outlined in an article on GoldSeek written by the CEO of the New Orleans Investment Conference. Here are some of his main points:
We are not going to exit QE and the Fed’s zero interest rate policy without some sort of a major market event. In effect, he noted that the tremendous expansion of the Fed’s balance sheet is absolutely unprecedented, actually “beyond comprehension,” and there is no easy path out of the predicament.
Gold is going “measurably” higher. When asked where the price of gold would be in a year, Dr. Greenspan demurred, noting that he would never make a market prediction. However, he volunteered that he would gladly predict where gold would be in five years...and that it would be “measurably” higher for various reasons.
An inflationary bonfire is just a spark away. In particular, he agreed that the only reason we have yet to see inflationary pressures was because most of the money printed through QE had found a home not in the economy, but in the banks’ $2.7 trillion of excess reserves being held at the Fed, where they’re earning about a quarter-point of interest.
The Fed doesn’t really control interest rates. In other words, the market will set rates, and the Fed will lose control. Although he didn’t express it, the comparison with the stagflation of the 1970s is obvious and concerning.
The Fed says that total public debt outstanding is now $17.8 trillion, but don’t believe it. It’s actually incalculably higher.