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Bernanke Attacks Gold Standard, Praises Fiat Money

Written by Gary North on March 22, 2012

Ben Bernanke, Dr. Fiat Money, attacked the gold standard in a speech. He was speaking at George Washington University, which 35 years ago granted Mark Skousen his Ph.D. in economics. Skousen wrote his dissertation defending the gold standard. It was published in 1988, Economics of a Pure Gold Standard. It is clear that Dr. Bernanke has never read it. He would not like it if he did read it.

Bernanke’s objection to the gold standard is Skousen’s reason for supporting it. Bernanke said that  such a system handicaps the government’s ability to address economic conditions. Exactly!

“Since the gold standard determines the money supply, there is not much scope for the central bank to use monetary policy to stabilize the economy.” That’s it!

“Under a gold standard, typically the money supply goes up and interest rates go down in a period of strong economic activity — so that’s the reverse of what a central bank would normally do today.” That’s not it. In fact, that’s what central banks do. Under a gold standard, the money supply is stable, interest rates go down, and so do prices.

Most economists credit the Fed for acting forcefully by lowering interest rates aggressively once it realized the magnitude of the 2007-2009 crisis. But policymakers, including Bernanke, have been chided for downplaying the housing downturn in its early stages and for turning a blind eye to flaws in the regulatory system that laid the groundwork for the boom and bust.

Bernanke defended the need for a central bank. Surprise, surprise!

Never before has any FED chairman had to do this. The FED is under attack, for the first time since it opened its doors in 1914

“You need to be attentive to where the economy is and not move too quickly to reverse the policies that are helping the recovery,” he said.

He is a bureaucrat defending the wisdom of bureaucrats. It is nice to see him on the defensive.

Continue Reading on www.reuters.com

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8 thoughts on “Bernanke Attacks Gold Standard, Praises Fiat Money

  1. The problem for Bernanke and virtually all Ph.D. economists is that they would be unemployed under a reasonably free-market gold standard. The lust for power and control, and the desire for employment, is reason enough for Bernanke and others of his ilk to object.

    The curtain will be pulled back. The walls will come tumbling down. (Am I missing one?)

  2. SEAN MURRY says:

    Heis one of those robber barons.

  3. http://www.petition2congress.c... Go to this website and sign the petition to vet Obama for eligibility. The lame stream media never vetted him in 08. The were too busy genuflecting.

  4. Of course he loves fiat currency. The Fed can print as much of their worthless funny money as they choose, but the crooks cant make more gold.

  5. max penn says:

    From 1776 till 1913 the US dollar gained buying power. From 1913 until today the US dollar lost 99% of it's buying power!! Something happened in 1913, it was the creation of the Federal Reserve. They are killing the US dollar. A $20.00 gold coin minted in 1913 takes $1778.00 dollars to buy today. That's a huge loss to everyone. In 1967 I could buy a gallon of gas for .19 cents. I would fill my VW gas tank for $1.90. Can't even buy one gallon now with $1.90. Is anyone paying attention ??

  6. Of course Bernanke love fiat money , he can keep printing worthless toilet paper and lie to us about how good it is while he and his boss loot all the gold for their retirements while America goes bankrupt . Classic example of how to steal a country and be a dictator . Anyone remember a guy named Lenin ? He stole a country and enslaved its people , the NWO gang is up to the same tricks . People need to wake up !

  7. nothing is going to change in this country until we the people vote every single currupt senator and congressman out of office. all of them have to go, to turn this country around. that is the only, only answer vote out curruption

  8. Richard Gallois says: