"In his last Press briefing (in 1987), Greenspan hinted that the US economy required continuing mild inflation, say circa 2%, and consequently a similar devaluation of the US dollar against gold. Monetary error between 1997 and 2002 caused the gold price to plunge and delivered a sharp dose of monetary deflation that hit US dollar debtors especially hard, e.g. Asia, Russia and Enron.

The monetary boost post-9/11 restored the gold price to its 2% trend and helped revitalise the American economy. If Fed policy does ‘target’ gold at levels close to US$500/oz. around early 2006, this would be consistent with Greenspan’s original intentions. Sharply higher or sharply lower nominal gold prices stand as a warning, respectively,of monetary inflation and monetary deflation. Stock markets like neither, and every past stock market crash can be categorised as either a crisis of monetary deflation or a crisis of monetary inflation."