The True Gold Standard (Second Edition)
"I got along with him fine. But Ben Bernanke thinks he's the smartest guy in the room, and wanted everyone to know it," remarked an acquaintance who used to sit in policy meetings with him. I was reminded of the remark when I read that Bernanke would become the first Federal Reserve Chairman to hold press conferences after meetings of the Federal Open Market Committee (FOMC). Bernanke specialized at Princeton in the Great Depression. Yet he ignored Jacques Rueff's contemporaneous explanation. As the chart shows, U.S. stock market speculation rose and fell step for step with foreign dollar reserves invested in New York. Bernanke and the Fed were thus surprised when the crude oil price rocketed to $150 a barrel in 2008 after earlier massive expansion of foreign official dollar reserves, triggering another stock crash-and by the latest round of commodity-led inflation, due this time mostly to the Fed's doubling of its balance sheet after that crash. How will lectures to the press wear, as evidence mounts of policy failures caused by the Federal Reserve ignoring the results of its own and other central banks' actions?
The Federal Reserve System's James Narron and David Skeie, career officials with the Federal Reserve System, are two eminent historically erudite figures. Writing in the New York Federal Reserve Bank's online publication, Liberty Street Economics, they recently provided a continuation of their valuable historical "revue," Crisis Chronicles: The Collapse of the...
Jul 14, 2014
On July 6th, Nobel economics laureate and Princeton Professor launched, in the New York Times, one of his occasional polemics, entitled Conservative Delusions About Inflation, against proponents of the gold standard. Krugman Caricature under creative commons license from DonkeyHotey As usual, Prof. Krugman is, conveniently for the position he takes, beyond lopsided...
Jul 23, 2014
An article headline in Saturday’s Wall Street Journalread “Rate Talk Heats Up Within The Fed.” As Journalreporters Jon Hilsenrath and Michael Derby...
Oct 05, 2012
Key Monetary Writings
Ezra Klein (2012) comments: In 1981, the country really was facing an inflation problem. It made sense that people would be...
Why the Gold Standard?