Yesterday’s big news for gold investors and monetary policy observers was the take-down (that’s certainly the impression you get from reading the related headlines) of the gold standard by Fed Chief Ben Bernanke.

In Origins and Mission of the Federal Reserve, the first in a four-part lecture series, Bernanke laid out the case against fixing a nation’s money to such a barbarous relic, offering all the usual arguments about inflexibility, frequent financial panics, etc. There’s nothing new or surprising here because a gold standard is anathema to any modern day economist, but here’s the chart that caught my attention (highlights added):

Perhaps it would have been better to not bring up price stability at all, since, I don’t see how you can credibly spin that as being a negative for the gold standard.

While the U.S. experience with hard money was far from perfect, it resulted in regular bouts of inflation and deflation that, in the end, worked out to be, basically, zero percent inflation for over a hundred years, ending in the early-20th century. During that time, the only serious bout of inflation occurred during the Civil War when the nation printed pure fiat money called “greenbacks” to pay for the war.

This compares rather favorably to the experience since the Federal Reserve was founded in 1913, during which time the U.S. dollar has lost about 98 percent of its value, due primarily to the Fed’s policies.