{"id":14265,"date":"2022-11-03T23:27:25","date_gmt":"2022-11-03T23:27:25","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/former-fed-chair-alan-greenspan-says-decreasing-supply-of-greenbacks-makes-the-us-dollar-a-better-store-of-value-economics-bitcoin-news\/"},"modified":"2022-11-03T23:27:25","modified_gmt":"2022-11-03T23:27:25","slug":"former-fed-chair-alan-greenspan-says-decreasing-supply-of-greenbacks-makes-the-us-dollar-a-better-store-of-value-economics-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/former-fed-chair-alan-greenspan-says-decreasing-supply-of-greenbacks-makes-the-us-dollar-a-better-store-of-value-economics-bitcoin-news\/","title":{"rendered":"Former Fed Chair Alan Greenspan Says Decreasing Supply of Greenbacks Makes the US Dollar a ‘Better Store of Value\u2019 \u2013 Economics Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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On Nov. 2, 2022, the American economist and 13th chairman of the U.S. Federal Reserve, Alan Greenspan, published an opinion editorial that says he envisions a monetary \u201ctailwind\u201d for the U.S. dollar next year. Greenspan expects this to happen even if the Fed decides to pivot its restrictive monetary policy to lower rate hikes or absolve them altogether.<\/strong><\/p>\n

Greenspan Discusses Gresham\u2019s Law and the Monetary \u2018Tailwind\u2019 Behind the U.S. Dollar<\/h2>\n

Alan Greenspan shared his opinion on Wednesday in a blog post<\/a> called \u201cGresham\u2019s Law.\u201d The former Federal Reserve chair described Gresham\u2019s law in his op-ed, and he noted that it can be \u201ccolloquially simplified to \u2018bad money drives out good.\u2019\u201d Greenspan now serves as a senior economic adviser to Advisors Capital Management, and he believes a strong wind blowing in the direction of the greenback will continue to bolster the U.S. dollar.<\/p>\n

\u201cEven if, as some prognosticators expect, U.S. inflation crests in the first half of 2023, and the Federal Reserve can slow or even stop the pace of rate increases, the U.S. dollar will still have a monetary tailwind to support it,\u201d Greenspan wrote on Wednesday. He also said that fiat currencies have made examples of Gresham\u2019s law a lot more scarce.<\/p>\n

\u201cNo longer are there [differences] in intrinsic (commodity) value causing one currency to be favored over another,\u201d Greenspan\u2019s blog post details. \u201cHowever, foreign exchange rates do reflect some of the forces Gresham originally recognized at work.\u201d<\/p>\n

The former Fed chairman added:<\/p>\n

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The present strength in the U.S. dollar in relation to the other traditional reserve currencies is one example of market participants choosing to hoard what they view as \u201cgood money\u201d \u2013 or at least better money.<\/p>\n<\/blockquote>\n

Unlike the members of the United Nations,<\/a> execs in the private sector<\/a>, and U.S. politicians<\/a>, Greenspan believes the Fed\u2019s quantitative tightening (QT) schemes are helpful. The economic adviser further explained that while some people view the QT as restrictive, some have perceived the dollar\u2019s disappearing act as a strong store of value (SoV). The greenback has rebounded during the past 24 hours after a slight slump earlier in the week, according to metrics associated with the U.S. Dollar Currency Index (DXY)<\/a>.<\/p>\n

\u201cThe elephant in the room with respect to continued strength in the US dollar going forward may turn out to be the $95 billion per month reduction in the Federal Reserve\u2019s balance sheet,\u201d Greenspan\u2019s op-ed further notes. \u201cThe fact that the supply of U.S. dollars can be expected to steadily decrease makes it a better store of value,\u201d the former Fed chair added.<\/p>\n

Greenspan\u2019s commentary follows the recent fourth consecutive 75 basis point rate hike<\/a> by the U.S. central bank, and Jerome Powell\u2019s comments<\/a> that followed when he said it would be \u201cvery premature\u201d to slow down the rate hikes right now.<\/p>\n

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13th Fed Chair<\/a>, Advisors Capital Management<\/a>, Alan Greenspan<\/a>, American economist<\/a>, Bad Money<\/a>, Central Banks<\/a>, comments<\/a>, economics<\/a>, Economist<\/a>, fed rate hikes<\/a>, Federal Reserve<\/a>, Former Fed Chair<\/a>, Good Money<\/a>, Greenback<\/a>, Greenspan<\/a>, Greenspan Op-Ed<\/a>, Gresham\u2019s Law<\/a>, inflation<\/a>, jerome powell<\/a>, Monetary Tailwind<\/a>, op-ed<\/a>, SOV<\/a>, store of value<\/a>, U.S. dollar<\/a>, US Central Bank<\/a>, USD<\/a>, worlds reserve currency<\/a><\/div>\n<\/div>\n

What do you think about the former Fed chief saying that he expects a monetary tailwind to support the greenback next year? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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