Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
In the same category

Inflation – Before and After the Federal Reserve

IMG Auteur
 
 
Published : March 21st, 2012
375 words - Reading time : 0 - 1 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Editorials

 

 

 

 

In a lecture yesterday, Federal Reserve Chairman Ben Bernanke made the mistake of talking about inflation during his critique of the gold standard, going so far as to say that when the barbarous relic was used as the foundation of our monetary system “over the medium run, it sometimes caused periods of inflation and deflation” (see this item from earlier in the day for links and other specifics).

That struck me as a particularly odd way of addressing a subject that probably shouldn’t have been addressed at all and that prompted the creation of the chart shown below using data from … the Federal Reserve.

Maybe it’s just me (after all, my background is as an engineer, not as an economist), but, the hard money days prior to the formation of the Federal Reserve sure seem to be a better alternative to what we’ve had over the last hundred years, inflation-wise, especially when looking at the slope of that red curve since the last vestiges of sound money were abandoned back in 1971.




When you think about it, any sensible central bank chief serving decades after the launch of another experiment with pure fiat money really shouldn’t be talking about the gold standard at all. History shows that these pure paper money systems usually run their course after a few decades (sometime much sooner) and, depending upon how many terms Bernanke serves as Fed Chairman, that could occur on his watch.

I mean, what’s the possible upside in calling attention to the gold standard in general and, in particular, to the inflation data under that system as compared to what we’ve got now?

Former Fed Chief Alan Greenspan was careful to only make substantive comments about the yellow metal before (Gold and Economic Freedom) and after (Stunner: Gold Standard Fully Supported By… Alan Greenspan!?) he ran the world’s most powerful central bank and Bernanke would do well to follow that lead.

But, if our current Fed Chief feels as though he must talk about how returning to a gold standard would be problematic today (probably as a result of increasing calls from the public as they see rising prices everywhere but in the government’s statistics), he should probably just leave out the part about inflation.

 

 

Companies Mentionned : Gold |
<< Previous article
Rate : Average :0 (0 vote)
>> Next article
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Aurcana(Ag-Au-Zn)AUN.V
Change of Auditor
CA$ 0.24-2.04%Trend Power :
Corporate news
Gray Rock(Au)GRK.V
Gray Rock Closes Non-Brokered Private Placement
CA$ 0.02+0.00%Trend Power :
Corporate news
BowmoreBOW.V
Bowmore Closes First Tranche of Private Placement and Resignation of Board Member
CA$ 0.07+0.00%Trend Power :
Corporate news
Newmont(Cu-Le-Ni)NEM
Newmont Mining Acquires Cripple Creek from AngloGold
US$ 23.67+2.33%Trend Power :
Corporate news
Newmont(Cu-Le-Ni)NEM
Newmont Mining Asset Optimization Efforts Encourage Analysts
US$ 23.67+2.33%Trend Power :
Corporate news
Teuton(Ag-Au-Co)TUO.V
Teuton’s Harry and Silver Crown Properties located West and East of Ascot’s Dilworth Property up for Option
CA$ 0.08-5.88%Trend Power :
Corporate news
Royal Dutch Shell(Oil)RDSA.AS
This Week In Energy: Top 4 Reasons Oil Prices Are Heading Back Down
€UR 25.54-0.66%Trend Power :
Corporate news
PetrobrasPBR
Petrobras to Sell Stake in Bijupira & Salema Fields for $25M - Analyst Blog
US$ 8.83+2.08%Trend Power :
Corporate news
Royal Dutch Shell(Oil)RDSA.AS
Shell to Go Ahead with GoM Appomattox Deepwater Project - Analyst Blog
€UR 25.54-0.66%Trend Power :
Corporate news
BP plc(Ngas-Oil)BP
BP to Settle Federal, State GoM Oil Spill Claims for $18B - Analyst Blog
US$ 41.29+5.14%Trend Power :
Corporate news
Comments closed