Greenspan the Goldbug vs Greenspan the Fed Chair: The 18-Year Gap

The numbers tell the story. Gold, which Greenspan once called the only honest money, fell from $450 an ounce in 1987 to below $300 by 2000. The metal spent two decades in a bear market as his easy money fueled equities instead. The gold profile shows the long slide coincided with his tenure.

Some market historians argue Greenspan adapted to a changed world. A gold standard would have constrained the Fed's ability to respond to crises. Others say he abandoned principle for power. The debate continues. The record does not: Greenspan's Fed did not follow the gold standard playbook.

For traders, the lesson is about regime change. Greenspan's appointment marked the end of gold-standard thinking inside the Fed. The central bank became an active manager of financial conditions, not a passive rule-follower. That shift shaped every subsequent crisis and recovery. His successor, Ben Bernanke, doubled down on the same approach.

Part 1 of this series covered Greenspan's early intellectual journey. Part 2 shows the execution gap between theory and practice. The next installment will examine how the 2008 crisis forced a rethinking of the Greenspan legacy.