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1997-1999 transcripts
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The Alan Greenspan-Ron Paul Congressional Exchanges

Transcripts of the historic hearings before the U.S. House of Representatives’ Committee on Financial Services during question & answer sessions, 1997-2005



Dr. PAUL. Thank you, Mr. Chairman.

Good morning, Mr. Greenspan. I understand that you did not take my friendly advice last fall. I thought maybe you should look for other employment, but I see you have kept your job.

I am pleased to see you back, because at least you remember the days of sound money, and you have some respect for it. Even though you do describe it as nostalgia, you do remember the days of sound money. So I am pleased to have you here.

Of course, my concern for your welfare is that you might have to withstand some pummeling this coming year or two when the correction comes, because of all the inflation that we have undergone here in the last several years.

But I, too, like another Member of this committee, believe there is some unfairness in the system, that some benefit and others suffer. Of course, his solutions would be a lot different than mine, but I think a characteristic of paper money, of fiat money, is that some benefit and others lose.

A good example of this is how Wall Street benefits. Certainly Wall Street is doing very well. Just the other day, I had one of my shrimpers in my district call me and say he is tying up his boat. His oil prices have more than doubled and he cannot afford it, so for now he will have to close down shop. So he suffers more than the person on Wall Street. So it is an unfair system.

This unfairness is not unusual. This characteristic is well-known, that when you destroy and debase a currency, some people will suffer more than others. We have concentrated here a lot today on prices. You talk a lot about the price of labor. Yet, that is not the inflation, according to sound money economics.

The concern the sound money economist has is for the supply of money. If you increase the supply of money, you have inflation. Just because you are able to maintain a price level of a certain level, because of technology or for some other reason, this should not be reassurance, because we still can have our mal-investment, our excessive debt and borrowing. It might contribute even to the margin debt and these various things.

So I think we should concentrate, especially since we are dealing with monetary policy, more on monetary policy and what we are doing with the money.

It was suggested here that maybe you are running a policy that is too tight. Well, I would have to take exception to that, because it has been far from tight. I think that we have had tremendous growth in money. The last three months of last year might be historic highs for the increase of Federal Reserve credit. In the last three months, the Federal Reserve credit was increasing at a rate of 74 percent at an annual rate.

It is true, a lot of that has been withdrawn already, but this credit that was created at that time also influenced M3, and M3 during that period of time grew significantly, not quite as fast as the credit itself, but M3 was rising at a 17 percent annual rate.

Now, since that time, a lot of the credit has been withdrawn, but I have not seen any significant decrease in M3. I wanted to refer to this chart that the Federal Reserve prepared on M3 for the past three years. It sets the targets. For three years, you have never been once in the target range.

If I set my targets and performed like that as a physician, my patient would die. This would be big trouble in medicine, but here it does not seem to bother anybody. And if you extrapolate and look at the targets set in 1997 and carry that set of targets all the way out, you only missed M3 by $690 billion, just a small amount of extra money that came into circulation. But I think it is harmful. I know Wall Street likes it and the economy likes it when the bubble is getting bigger, but my concern is what is going to happen when this bubble bursts? I think it will, unless you can reassure me.

But the one specific question I have is will M3 shrink? Is that a goal of yours, to shrink M3, or is it only to withdraw some of that credit that you injected through the noncrisis of Y2K?

Mr. GREENSPAN. Let me suggest to you that the monetary aggregates as we measure them are getting increasingly complex and difficult to integrate into a set of forecasts.

The problem we have is not that money is unimportant, but how we define it. By definition, all prices are indeed the ratio of exchange of a good for money. And what we seek is what that is. Our problem is, we used M1 at one point as the proxy for money, and it turned out to be very difficult as an indicator of any financial state. We then went to M2 and had a similar problem. We have never done it with M3 per se, because it largely reflects the extent of the expansion of the banking industry, and when, in effect, banks expand, in and of itself it doesn’t tell you terribly much about what the real money is.

So our problem is not that we do not believe in sound money; we do. We very much believe that if you have a debased currency that you will have a debased economy. The difficulty is in defining what part of our liquidity structure is truly money. We have had trouble ferreting out proxies for that for a number of years. And the standard we employ is whether it gives us a good forward indicator of the direction of finance and the economy. Regrettably none of those that we have been able to develop, including MZM, have done that. That does not mean that we think that money is irrelevant; it means that we think that our measures of money have been inadequate and as a consequence of that we, as I have mentioned previously, have downgraded the use of the monetary aggregates for monetary policy purposes until we are able to find a more stable proxy for what we believe is the underlying money in the economy.

Dr. PAUL. So it is hard to manage something you can’t define.

Mr. GREENSPAN. It is not possible to manage something you cannot define.


Dr. PAUL. Thank you, Mr. Chairman.

Mr. Greenspan, I have a couple of questions today. One is a general question. I want to get a comment from you dealing with the Austrian free market explanation of the business cycle. I will lead into that, as well as a question about the productivity statistics that are being challenged in a few places.

But first off, I would like to lead off with a quote that I think is important that we should not forget about our past history. ”Every new era in our history”-and we have had several-”has been based upon the exaggerated enthusiasm and the inflationary forces set in motion by some single new industry or industrial activity.” This was written by Businessweek in 1930, a couple of days after the crash.

Also, I would like to remind my colleagues about surpluses, and I know we look forward to all the surpluses. First, that portion of the national debt we pay the interest on is still going up. So there is a question about if we have true surpluses. But even if we did, I would like to remind my colleagues that we were, as a country and as money managers, reassured in the 1920’s that our surpluses in the 1920’s would serve us well, and it did not predict what was happening in the 1930’s.

Basically, the way I understand the Austrian free market explanation of a business cycle is once we embark on inflation, the creation of new money, we distort interest rates and we cause people to do dumb things. They overinvest, there is malinvestment, there is overcapacity and there has to be a correction, and the many good members or well-known members of the Austrian school, I am sure you are well aware of them, Mises, Hayek and Rothbord, as well as Henry Hazlitt, have written about this, and really did a pretty good job on predicting. It was the reason I was attracted to their writing, because certainly, Mises understood clearly that the Soviet system wouldn’t work.

In the 1920’s, the Austrian economic policy explained what would probably come in the 1930’s. None of the Austrian economists were surprised about the bursting of the bubble in Japan in 1989, and Japan, by the way, had surpluses. And of course, the best prediction of the Austrian economists was the breakdown of the Brettan Woods agreement, and that certainly told us something about what to expect in the 1970’s.

But the concerns from that school of thought would be that we still are inflating. Between 1995 and 1999, our M 3 money supply went up 41 percent. It increased during that period of time twice as fast as the GDP, contributing to this condition that we have. We have had benefits as a reserve currency of the world, which allows us to perpetuate the bubble, the financial bubble. Because of our huge current account deficit, we are now borrowing more than a billion dollars a day to finance, you know, our prosperity, and most economists, whether they are from the Austrian school or not, would accept the notion that this is unsustainable and something would have to happen.

Even recently I saw a statistic that showed total bank credit out of the realm of day-to-day activity in control of the Fed is increasing at the rate of 22 percent. We are now the biggest debtor in the world. We have $1.5 trillion foreign debt, and that now is 20 percent of the GDP, and these statistics concern many of the economists as a foreboding of things to come.

And my question dealing with this is, where do the Austrian economists go wrong? And where do you criticize them and say that we can’t accept anything that they say?

My second question deals with productivity. There are various groups that have said that our statistics are off. Estevao and Lach claim, and this was written up in the St. Louis Fed pamphlet, that the temps aren’t considered and that distorts the views. Stephen Roach at Morgan Stanley said we don’t take into consideration overtime. Robert Gordon of Northwestern University says that 99 percent of the productivity benefits were in the computer industry and had very little to do with the general economy, and therefore, we should not be anxious to reassure ourselves that the productive increases will protect us from future corrections that could be rather serious.

Mr. GREENSPAN. Well, I will be glad to give you a long academic discussion on the Austrian school and its implications with respect to modern views of how the economy works having actually attended a seminar of Ludwig Mises, when he was probably 90, and I was a very small fraction of that. So I was aware of a great deal of what those teachings were, and a lot of them still are right. There is no question that they have been absorbed into the general view of the academic profession in many different ways, and you can see a goodly part of the teachings of the Austrian school in many of the academic materials that come out in today’s various journals, even though they are rarely, if ever, discussed in those terms.

We have an extraordinary economy with which we have to deal both in the United States and the rest of the world. What we find over the generations is that the underlying forces which engender economic change themselves are changing all the time, human nature being the sole apparent constant throughout the whole process. I think it is safe to say that economists generally continuously struggle to understand which particular structure is essentially defining what makes the economy likely to move in one direction or another in the period immediately ahead, and I will venture to say that that view continuously changes from one decade to the next. We had views about inflation in the 1960’s, and in fact, the desirability of a little inflation, which we no longer hold any more, at least the vast majority no longer hold as being desirable.

The general elements which contribute to stability in a market economy change from period to period as we observe that certain hypotheses about how the system works do not square with reality. So all I can say is that the long tentacles, you might say, of the Austrian school have reached far into the future from when most of them practiced and have had a profound and, in my judgment, probably an irreversible effect on how most mainstream economists think in this country.

Dr. PAUL. You don’t have time to answer the one on productivity, but in some ways, I am sort of hoping you would say don’t worry about these Austrian economists, because if you worry too much about them, and these predictions they paint in the past came true, in some ways we should be concerned, and I would like you to reassure me that they are absolutely wrong.

Mr. GREENSPAN. Let me distinguish between analyses of the way economies work and forecasts people make as a consequence of those analyses. The remarkable thing about the behavior of economies is they rarely square with forecasts as much as one should hope they did. I know there is a big dispute on the issue of productivity data. I don’t want to get into that. We would be here for the rest of the month. I think the evidence, in my judgment, is increasingly persuasive that there has been an indeed underlying structural change in productivity in this country.



Mr. PAUL. Thank you.

Welcome, Mr. Chairman. In the last few weeks, you have received a fair amount of criticism and suggestions about what to do with interest rates and the economy, and I think that is going to continue, because I suspect that we are moving into what you call-you do not call it a ”recession,” but a ”retrenchment.” I guess that may be a new word.

But anyway, there will be a lot of suggestions as to what you should do, and I do not want to presume to make a suggestion, what interest rates should be, but I would like to address more the system that you have been asked to manage, because in many ways I think it is an unmanageable system, and yet it is key to what is happening in our economy. We have a system that you operate where you are continuously asked to lower interest rates.

I would like to remind my colleagues and everybody else that when you are asked to lower interest rates, you are asked in reality to expand the money supply, because you have to go out and buy something. You buy debt. So every time somebody says, ”lower the interest rates,” they say ”inflate the money supply.” I think that is important.

You had a little conversation before about the money supply, and conceded it is important, but you admit you don’t even know what a good proxy is, so it is very difficult to talk about the money supply. I am disappointed that we don’t concentrate on that, talk about it more, even to the point now that we are-that you no longer make projections. I think this is admission almost of defeat.

There is no requirement for you to say, well, we are going to expand the money supply at a precise rate, so we are past that point of a tradition that has existed for a long time. But I think it is an unmanageable system and it leads to bad ideas and bad consequences, because we concentrate on prices, which is a consequence of the inflation of the money supply. Therefore, if a PPI is satisfactory, we neglect the fact that the money supply is surging, and doing a lot of mischief. Therefore we say, ”Well, maybe if we just slow up the economy. If we slow up the economy, it is going to take care of the inflation.”

I think we are really missing the point. You did mention a couple of words in your testimony today that I thought were important acknowledging that there are problems in the economy that we have to address. You talked about ”excesses” and ”imbalances” and the need for ”retrenchment.”

I believe what is important is that we connect the excesses and the imbalances to the policy that you operate, because I think that is key. Instead of being reassured that the PPI is OK, if we would have looked at the excesses, maybe there would have been an indication that there was a problem in the overspeculation in the stock market.

But here we have a monetary system that creates a speculation where NASDAQ goes to 5,000, and then we have a lot of analysts telling us it is a good buy, yet you now are citing the analysts as saying there is going to be a lot of growth. I am not sure which analyst you are quoting, but I am not sure that would be all that reassuring. But I think we should really talk about the money supply and what we are doing.

In 1996, you expressed a concern about ”irrational exuberance in the stock market,” and I think that was very justified. But since that time, the money supply measured by M3 went up $2.25 trillion. The stock market, of course, has soared. I see the imbalances as a consequence of excessive credit. The system has defects in it.

You are expected to know what the proper interest rate is. I don’t think you can know it, or the Federal Reserve can know. I think only the market can dictate the proper interest rate. I don’t think you know what the proper money supply is. You admit you don’t even have a good proxy for measuring the money supply. Yet that is your job, and yet all we ever hear is people coming and saying, ”Mr. Greenspan, if you want to avert a downturn, if you want to save us, just print more money.” That is essentially what this system is doing.

Now, the one question I have, quickly, is your plan that you mentioned in the Senate about using other securities like State bonds and foreign bonds, and others in order for you to buy more debt to monetize. I think it is ironic with a $5.7 trillion national debt, we are running out of things to buy.

Mr. GREENSPAN. Just remember that of that $5.7 trillion, a very large part is held in trust funds of the United States Government, so that the net debt is really $3.5 trillion, of which the Federal Reserve owns more than $500 billion.

Mr. PAUL. Could it be an advantage to make some of that marketable, rather than going out and buying municipal bonds, foreign debtor-state bonds?

Mr. GREENSPAN. No, because-I don’t want to get into the accounting processes here, but if you are dealing with a unified budget accounting system, all of that debt is intragovernmental transfers and essentially is a wash. You have to have external securities to affect the economy.

What we were discussing in the remarks with respect to what the Federal Reserve is looking at is what type of securities we could use for so-called ”repurchase agreements” which are collateralized. In other words, when we engage in an open market operation through a repurchase agreement, what we have now is Federal Government securities as collateral. The question is, if we don’t have them, what other kinds of collateral would we use? We are therefore talking about, for example, State and local securities.

But the crucial issue there is that to the extent that we use securities which are more risky than the Federal Government’s, we basically just take more collateral to offset that. So we can maintain the same degree of risk. And what we are trying to evaluate is various different types of securities which we can employ solely for the purpose of protecting the transaction from default.


Dr. PAUL. [Presiding.] You mention about the Keynesian approach to economics of a few decades ago, believing that they could eliminate the business cycle; and your conclusion is, really you can’t, because you can’t control human nature. And I agree that you can’t control human nature and I agree that human nature and subjectivity is very important.

But I would also argue that businessmen are human beings and enjoy human nature-they are rational humans, and they react in a rational way to interest rates and the signals they get from you and the Federal Reserve. And therefore, when interest rates are artificially kept low, they will do precisely what they have done; they generate to overcapacity. And, of course, in a recession, this has to be liquidated and we are now in that stage. It doesn’t surprise the hard money school that we are in this phase of liquidating this overcapacity, and it should be; but we
would also argue that the Fed may be doing exactly the wrong thing.

Everybody criticizes you. Nobody comes to you and says, ”Oh, Mr. Greenspan, you print too much money; you generate too much credit; your interest rates are too low.” But the argument from this other school is saying that, precisely the opposite.
It says that because, in the past, you manipulated interest rates, you have caused the boom, therefore, you have made it a certainty that we would have a recession. And literally, by quickly resuming the inflation, the debasement of the currency, that sometimes works and sometimes it doesn’t work and that we are now in a period where it isn’t working.

It didn’t work in Japan, and this is part of human nature too, or the way the businessman responds. One time he responds the way you want and the next time he does not. So, is there a possibility that you recognize that maybe interest rates were manipulated in the wrong direction, and maybe if we had to live with a fiat currency, it would have been better, since 1990, to take the average rate of the overnight rate and just make it 4.5 percent, just left it there, rather than doing this and causing all these gyrations?

I would like you to comment on this, these ideas about monetary policy, in the hopes that maybe we can avoid what we in the hard money school see as a very serious problem and one that could get a lot worse, where we do not revive our economy, just as Japan has not been able to revive theirs.

Mr. GREENSPAN. Mr. Chairman, so long as you have fiat currency, which is a statutory issue, a central bank properly functioning will endeavor to, in many cases, replicate what a gold standard would itself generate.

If you take the period in the United States where the gold standard was functioning as close as you can get to its ideal, which would be from probably 1879 probably through the turn of the century, you had a number of business cycles in that period. And in many respects, they had very much the same characteristics that
we just observed in the last couple of years: the euphoria that builds up when the outlook improves and people overextend themselves and the markets shut them down.

Well, what shut down the market was the very significant rise in real, long-term interest rates in 1999, and in that regard, that is the way a gold standard would have worked. So I would submit to you that the presumption that if you have a hard currency regime, you will somehow alter human nature any more than a fiat
currency one will, I will suggest that that does not happen.

I certainly agree with you that if we would just pump out liquidity indefinitely, the distortions that would occur in the system would be very difficult to pull back together. I submit that is not what we do, and indeed, I would argue that given the fact that we have a fiat currency and that is the law of the land, we do as good a job as one can do in the context of the issues that you raise.



Mr. PAUL. Thank you, Mr. Chairman.

Welcome, Chairman Greenspan. I wanted to start by referring to a speech you gave in January at the American Numismatic Society where you spoke profoundly about monetary policy and said that central bankers have had relative success over the past decades, and it raises hopes that the fiat monetary system can be managed in a responsible way. So I think you’re still at the point of hoping that this system will work. I maintain that the jury is still out on whether or not fiat money will work over the long-term.

And then you followed it up by saying, in case it didn’t work, and I don’t know whether you had tongue-in-cheek or not about this, but you said that we might have to go back to sea shells and oxen as our medium of exchange.

And then you reassured everybody that the discount window would have an adequate supply of oxen. Chairman Oxley, if we get to this point, which I suspect we will someday, I ask you that we have hearings to debate the issue of what medium of exchange we have before the Fed starts using oxen as a medium of exchange.

Chairman OXLEY. Are you referring to the Chairman here?

Mr. PAUL. Yes, I hope that you will at least consider that. But I think it is an important point and I want to relate that to the Enron issue, because in many ways, I think the system that you have been asked to manage is similar to being asked to manage an Enron system. Because Congress is notoriously in favor of deficit spending, we’re currently expanding the national debt at $250 billion a year, and we have nearly a $6 trillion debt.

Now we create that debt by buying votes. We spend a lot of money. Then the Federal Reserve comes in and they buy that debt in order to maintain the interest rate that they think is the right interest rate. And they take that and use it as an asset. You put it in the bank. You call this debt that we created an asset, and you use it as collateral for our Federal Reserve notes. So that’s a pretty good scheme, and I think in the moral terms, as well as the economic terms, it’s very similar to how Enron operates. I’m not convinced the system works very well because a lot of people here praise you for the adequate amount of liquidity and that’s what inflation is: create more money, lower interest rates. Every time you ask for liquidity, and every time you ask for lower interest rates, you’re asking for inflation of the money supply. I think that what we fail to do is to ask about the cost. Do we ever concern ourselves about the people who have had two-thirds of their income removed because they happened to be savers and living off interest? We gouge them with inflation, the loss of purchasing power, and taxes. A lot of people in this country have suffered from this particular system.

Now the analogy I would like to draw is something you said in your testimony on page 13, and you have mentioned several times now that Enron may be a good lesson, and I think it is. And I’m not for more of this regulation by SEC. I think you’re correct that derivatives provide a market tool that is worthwhile, but you also said the Enron decline is an effective illustration of the vulnerability of a firm whose market value largely rests on capitalized reputation, with very little on no physical assets. That’s exactly what our monetary system is all about, and that’s why I believe the dollar is vulnerable. We in Congress do not have a responsibility to run Enron. Some other government has the responsibility to deal with fraud. We have a responsibility to the dollar, and I think that’s what we fail so often to address around here.

In addition, you said that Enron provides encouragement that the force of market discipline can be counted on over time to foster a much greater transparency. That’s exactly what the market does with money. If you look at the rapid and the sudden devaluations of the fiat currencies around the world, such as what happened to us in 1979 and 1980, that was the market coming in and forcing vulnerability and transparency on us. Now gold gives you a hint as to what’s happening. Gold has sent a mild message in this past year. In spite of the fact that central banks and others continually sell and loan out gold and push the price of gold down, there is a message there.

So I would ask you, can you see any corollary whatsoever on what you’re asked to do in running our monetary system to that which Enron was involved in?

Mr. GREENSPAN. I hope there are fundamental differences. First, dealing with essentially a fiat currency, what it is that we are doing is that the currency is granted value by fiat of the sovereign, as it is said in the textbooks. The issue there is that in years past, there has been considerable evidence that fiat currencies have been mismanaged in general, and that inflation has been too often the result. What I was mentioning in the speech that you were referring to is the fact there is some evidence that we’re learning that lesson, learning how to manage a fiat currency. I’ve always had some considerable skepticism about whether that in the long run can succeed, but I must say to you that the evidence of recent decades is that it has been succeeding. Whether that continues is a forecast which I can’t really project on.

The Enron situation is essentially one in which there was an endeavor to imply that earnings were much greater than they really were, that increasing debt was hidden. I can think of no reason to have done what they did with their off-balance sheet transactions other than to obscure the extent of the debt they had, and what essentially was squandered in that process was the reputational capital which they had succeeded in achieving over a period of time. And I don’t perceive that anything that we are doing as a Central Bank involves anything related to that. I hope that where we need to be transparent and indicate what we are doing we do so, and we do so except in those areas where it, as I mentioned to you previously, inhibits the ability to actually function as a Central Bank.

But as I say in summary, I hope your analogy is inappropriate.

Mr. PAUL. I guess we’ll all keep hoping.


The gentleman from Texas, Dr. Paul.

Dr. PAUL. Thank you, Mr. Chairman. Welcome, Chairman Greenspan. I have listened carefully to your testimony, but I get the sense I may be listening to the chairman of the board of Central Economic Planning rather than the Chairman of a Board that has been entrusted with protecting the value of the dollar.

I have, for quite a few years now, expressed concern about the value of the dollar, which I think we neglect here in the Congress, here in the committee, and I do not think that the Federal Reserve has done a good job in protecting the value of the dollar. It seems that maybe others are coming around to this viewpoint, because I see that the head of the IMF Mr. Koehler, has expressed a concern and made a suggestion that all the central bankers of the world need to lay plans for the near future to possibly prop up the dollar. So others have this same concern.

You have in your testimony expressed concern about the greed factor on Wall Street, which obviously is there, and you implied that this has come out from the excessive capitalization, excessive valuations, which may be true. But I think where you have come up short is in failing to explain why we have financial bubbles. I think if you have fiat money and excessive credit, you create financial bubbles, and you also undermine the value of the dollar, and now we are facing that consequence.

We see the disintegration of some of these markets. At the same time, we have potential real depreciation of the value of our dollar. We have pursued rampant inflation of the money supply since you have been chairman of the Federal Reserve. We have literally created $4.7 trillion worth of new money in M-3. Even in this last year with this tremendous burst of inflation of the money supply, it has gone up, since last January, over $1 trillion. You can’t have anything but lower value of that unit of account if you keep printing and creating new money.

Now, I would like to bring us back to sound money, and I would want to quote an eminent economist by the name of Alan Greenspan who gives me some credibility on what I am interested in. A time ago you said, ”in the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value without gold. This is the shabby secret of the welfare state that tirades against gold. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

But gold always has always had to be undermined if fiat money is to work, and there has to be an illusion of trust for paper money to work. I think this has been happening for thousands of years. At one time the kings clipped coins, then they debased the metals, then we learned how to print money. Even as recently as the 1960s, for us to perpetuate a myth about our monetary system, we dumped two-thirds of our gold, 500 million ounces of gold, on to the market at $35 an ounce, in order to try to convince people to trust the money.

Even today, there is a fair amount of trading by central banks in gold, the dumping of hundreds of tons of gold, loaning of gold, for the sole purpose of making sure this indicator of gold does not discredit the paper money, and I think there is a definite concerted effort to do that.

My questions are twofold relating to gold. One, I have been trying desperately to find out the total amount of gold either dumped and sold on the markets by all the central banks of the world, or loaned by the central banks of the world. This is in hundreds and hundreds of tons. But those figures are not available to me. Maybe you can help me find this.

I think it would be important to know since all central banks still deal with and hold gold, whether they are dumping or loaning or buying, for that matter. But along this line, I have a bill that would say that our government, our Treasury, could not deal in gold and could not be involved in the gold market, unless the Congress knows about it.

That, to me, seems like such a reasonable approach and a reasonable request, but they say they don’t use it, so therefore, we don’t need the bill. If they are not trading in gold, what would be the harm in the Congress knowing about handling and dealing with this asset, gold?

Mr. GREENSPAN. Well, first of all, neither we nor the Treasury trades gold. My impression is that were we to do so, we would announce it. It is certainly the case that others do. There are data published monthly or quarterly which show the reported gold holdings in central banks throughout the world, so you do know who holds what.

The actual trading data, I don’t think is available, although the London Gold Exchange does show what its volume numbers are, and periodically individual central banks do indicate when they are planning to sell gold, but they all report what they own. So it may well be the case that you can’t find specific transactions, I think, but you can find the net results of those transactions, and they are published. But as far as the United States is concerned, we don’t do it.

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