by Thorsten Polleit 

On June 22, 2026, the former Chairman of the U.S. central bank, Alan Greenspan, died at the advanced age of 100. Greenspan is regarded as one of the most influential central bankers of recent history. As Chairman of the U.S. Federal Reserve (Fed) from 1987 to 2006, he shaped American finance and the economy for nearly two decades.

Alan Greenspan was born on March 6, 1926, in New York City. In his youth, he was initially interested in music, playing clarinet and saxophone in various bands. Later, he studied economics at New York University, earning a Bachelor’s degree with honors in 1948, a Master’s in 1950, and a PhD in 1977. In the 1950s, he co-founded the economic consulting firm Townsend-Greenspan & Co. with William Townsend, which he led for many years.

Greenspan’s political career began in the 1970s. Under President Gerald Ford (1913–2006), he served as Chairman of the Council of Economic Advisers from 1974 to 1977. President Ronald Reagan (1911–2004) appointed him Fed Chairman in August 1987, and he remained in office—despite several changes in the U.S. presidency—until January 2006. At roughly 18½ years, he holds the record for the longest-serving Fed Chairman ever.

During Greenspan’s tenure, several crises shook not only America but the entire world: the 1987 stock market crash, the 1990–1991 recession, the 1997 Asian crisis, the dot-com boom and bust of 2000/2001, and the economic fallout from the September 11, 2001 terrorist attacks. He is widely said to have mastered them all. And so, over the years, Greenspan’s stature and fame grew steadily.

He came to embody the Fed and its monetary policy, becoming its universally revered high priest. Many of his statements were veiled, some mysterious or even incomprehensible. Consider this example: “Since I’ve become a central banker, I’ve learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said.”

Nevertheless, financial market participants followed and interpreted Greenspan’s every word with the greatest attention and fervor. Interpreting his murmurs even developed into a new profession: being a “Fed Watcher” became the noble discipline among financial market analysts.

Greenspan remains widely known for his warning about “Irrational Exuberance.” In December 1996, he used these words to caution against the consequences of overheated stock markets during the dot-com bubble (which only began to collapse in March 2000, though, around the time Robert J. Shiller published his book of the same title).

In his younger years, Greenspan’s thinking was heavily influenced by the philosopher Ayn Rand (1905–1982), who advocated for capitalism and individual freedom. Greenspan declared himself a supporter of the gold standard, viewing it as the only way to achieve sound money that would protect wealth from the state’s inflationary confiscation.

However, once he began his career in politics, he moderated his radically libertarian views and became (to put it diplomatically) more pragmatic. It would be more accurate to say that Greenspan switched sides, compromised his former philosophical and ethical convictions, and allied himself with anti-freedom forces, placing himself at their service.

To the American economist Murray N. Rothbard (1926–1995), who knew Greenspan personally, he was the classic “sell-out”—a traitor to the libertarian movement: someone who used libertarian rhetoric to gain political power but never employed it for genuine freedom, and was even willing to do the opposite. Rothbard despised Greenspan’s decision to serve as Fed Chairman.

For as the Fed’s Chairman, Greenspan (like all his predecessors) was the head of the U.S. banking cartel and thus of the U.S. dollar fiat money regime. The latter is well known to suffer from unacceptable economic and ethical defects—insights that, judging by his biography, were familiar to Greenspan.

Greenspan’s influence on Fed monetary policy proved particularly far-reaching, and it was anything but benign or harmless. The Fed does have objectives assigned by Congress—such as promoting employment and keeping price inflation and interest rates low. Under Greenspan, however, the Fed became the generous and reliable financier of the banking and financial industry—which, unsurprisingly, hailed him as the greatest central banker of all time and called him the “Maestro.”

During Greenspan’s era, central banking was deployed more ruthlessly than ever before to serve “Big Banking” and the state. Consider the “Greenspan Put”: after the 1987 stock market crash, the Fed responded by cutting interest rates and expanding the money supply because stock prices had fallen sharply.

This created massive “moral hazards” that persist to this day: investors lose their risk aversion and take on excessive risks because they know the central bank will bail them out in a crisis, absorb their losses, while the costs—in the form of rising price inflation—are borne not by them but by the general public.

Contrary to what many believe, the Greenspan era was a period of relatively high price inflation. While consumer goods prices did not rise excessively (official statistics show average CPI inflation of 3.1% per year on average), asset prices inflated far more strongly. Stock markets rose by an average of 7.6% per year (excluding dividends), and housing markets by up to 6.5%. Greenspan’s policies thus fueled asset price inflation—to the cheers of the banking and financial industry and all those who owned stocks and houses. Money holders were left behind; they could buy ever fewer stocks and houses with their money.

Greenspan was also the one who essentially freed central bank policy from any rule-based constraints. The benchmark for setting interest rates was no longer credit and money supply growth, but his personal interpretation and judgment. Because the Greenspan Fed effectively acted as a “world central bank” and its policies were imitated by central bankers in other currency areas, discretion became the basis of monetary policy worldwide.

As noted earlier, Greenspan is often praised for successfully steering the U.S. and global economy through difficult times and crises, enabling a long phase of economic prosperity. Unfortunately, this is a misinterpretation. Financial and economic crises are inevitable consequences of the fiat money regime operated by central banks in close cooperation with commercial banks.

That said, central bank interventions are the cause of crises, not the solution. Yet Greenspan, like no one before him, managed to convey the exact opposite to the public: that crises arise out of nowhere and their causes are essentially unpredictable—when in reality it is the central banks themselves, through interest rate distortions and money supply expansion, that cause them.

The great financial and economic crisis of 2008/2009 (which hit the world after Greenspan had already left office) was thus a legacy of Greenspan—a delayed legacy of his monetary policy: the unrestrained expansion of credit, the artificial suppression of market interest rates, the assurance that the central bank would catch the financial markets in a crisis, and the moral hazards this fostered and cultivated.

After leaving office, Greenspan at least spoke some truths openly. In an NBC interview in August 2011, he frankly stated that the United States could never go bankrupt with its fiat dollar: “The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.”

And in old age, over 90, he became increasingly critical of exploding U.S. government debt and unfunded social spending (Social Security, Medicare, and Medicaid). Greenspan saw these as a serious long-term threat to growth and productivity in America, and a growing inflation risk. He also occasionally emphasized gold’s special role as reliable money, calling it the “ultimate means of payment.” However, he never fundamentally challenged the fiat money regime.

Many commentators praise Greenspan as a great central banker. There is no doubt that he enjoys effectively cult status and has been elevated to an icon of Fed monetary policy. From an economic perspective, however, a very different assessment is called for.

The Greenspan era is essentially a textbook illustration of all the pernicious effects that the fiat money regime and central bank money monopoly produce. It inevitably causes price inflation, unequal and unjust distributions of income and wealth, drives economies into over-indebtedness, causes government debt to balloon, paves the way for the “deep state” and state omnipotence, and makes financing wars easier—and thus more frequent.

Greenspan was masterful at concealing the evils of the fiat money regime from the public: that it serves a few while plundering, dominating, and suppressing many others, making them dependent on the continuation of the system. He succeeded in having the public see the Greenspan Fed as the “savior in times of need,” failing to recognize that it was the cause of the very ills—such as inflation and crises—that were being complained about. People mistook the economic arsonist for the firefighter. This allowed the fiat money regime to operate with little criticism or resistance, serving special interest groups at the expense of the general population.

There is no question that the core problem is the state fiat money system. But those individuals who place themselves in its service and sell it to the public as good, right, and without alternative—especially Alan Greenspan—are a very large part of the problem.

Greenspan’s legacy should not be the glorified image of a “master of monetary policy,” but rather the insight that the fiat money regime is a great evil from which society should free itself as quickly as possible. One should not be blinded or carried away by the supposed skills and wisdom of individuals who claim they can master, balance, and make reliable the fiat money system. All of that is an illusion—a false and ultimately fatal promise.