Helicopter Ben rails against gold standard

[phideaux]

What can you say...




Professor Bernanke rails against gold standard

By Annalyn Censky March 20, 2012: 3:37 PM ET

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Federal Reserve Chairman Ben Bernanke headed back to the classroom Tuesday, and defended the Fed against its most outspoken critic, Ron Paul.

In a lecture otherwise about Fed history and the Great Depression, Bernanke devoted four slides to discussing "problems of the gold standard."

For years, Congressman (and now presidential candidate) Ron Paul has argued to abolish the Fed and revert back to a system where U.S. dollars can be redeemed for gold.

The United States abolished the gold standard in 1933, and fully moved away from a fixed exchange rate in 1971. Bernanke defended that decision Tuesday, saying a gold standard creates an "awful big waste of resources."

"To have a gold standard, you have to go to South Africa or someplace and dig up tons of gold and move it to New York and put it in the basement of the Federal Reserve Bank of New York and that's a lot of effort and work," he said.

A student pressed him on the issue, asking him to play Devil's advocate: "Given everything that we know about monetary policy now and about the modern economy, why is there still an argument for returning to the gold standard and is it even possible?"

Bernanke didn't bite. He said that there is not enough gold for a global gold standard and that "the world has changed."

"I understand the impulse, but I think if you look at actual history, you'll see that the gold standard didn't work that well and it worked particularly poorly after World War I," he added. "There's a good bit of evidence that the gold standard was one of the main reasons that the Depression was so deep and long."

Tuesday's lecture is the first of a four-part series at George Washington University. The Fed plans to post the full videos online.

Bernanke already has a long history in academia. Before he joined the Federal Reserve's Board of Governors in 2002, he taught economics at Princeton University

http://economy.money.cnn.com/2012/03...rd-6/?iid=Lead

[southfork]

"To have a gold standard, you have to go to South Africa or someplace and dig up tons of gold and move it to New York and put it in the basement of the Federal Reserve Bank of New York and that's a lot of effort and work," he said."


He is quite right about that as the US has no gold to allow us to go to a true gold standard, the rest of the world would want audited stockpiles which we dont have.

[anywoundedduck]

"To have a gold standard, you have to go to South Africa or someplace and dig up tons of gold and move it to New York and put it in the basement of the Federal Reserve Bank of New York and that's a lot of effort and work," he said."


He is quite right about that as the US has no gold to allow us to go to a true gold standard, the rest of the world would want audited stockpiles which we dont have.

BUT.....The United States Bullion Depository holds 4,577 metric tons (5046 tons) of gold bullion (147.2 million oz. troy). This is roughly 2.5% of all the gold ever refined throughout human history. Even so, the depository is second in the United States to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds 7,000 metric tons (7716 tons) of gold bullion (225.1 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations.

If gold price were adjusted, in an attempt to reflect all the fiat floating around, say to $10,000 per ounce, we would be well on the way to establishing a gold standard, without digging up another ounce.

BUT.....In an obvious Freudian Slip by Professor Bernanke, he was assuming that no gold exists in the United States, at all when he made this statement.

[southfork]

BUT.....The United States Bullion Depository holds 4,577 metric tons (5046 tons) of gold bullion (147.2 million oz. troy). This is roughly 2.5% of all the gold ever refined throughout human history. Even so, the depository is second in the United States to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds 7,000 metric tons (7716 tons) of gold bullion (225.1 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations.

If gold price were adjusted, in an attempt to reflect all the fiat floating around, say to $10,000 per ounce, we would be well on the way to establishing a gold standard, without digging up another ounce.

BUT.....In an obvious Freudian Slip by Professor Bernanke, he was assuming that no gold exists in the United States, at all when he made this statement.

Gold plated tungsten does not count

[ralleia]

I'm just feeling things out here...no hard facts or evidence.

It seems to me that going to a gold standard would effectively destroy the choke-hold that the U.S. currency has as the world reserve. If we allowed U.S. currency to be openly denominated in gold, then why would anyone need to trade in our dollars any more?

And then also, the Federal Reserve, in cahoots with the U.S. Federal government would no longer be able to inflate the currency and hide it. Right now they can inflate it and pass on that as a hidden tax, borne more by those that get the dollars later. If tied to gold, they wouldn't really be able to inflate the dollars at all.

If we can't inflate any more, we collapse into deflation sooner, rather than whatever we've got coming up whenever we are guessing that it will happen.

BUT.....In an obvious Freudian Slip by Professor Bernanke, he was assuming that no gold exists in the United States, at all when he made this statement.

You mean we HOPE that it was a Freudian slip?

[bemac]

"To have a gold standard, you have to go to South Africa or someplace and dig up tons of gold and move it to New York and put it in the basement of the Federal Reserve Bank of New York and that's a lot of effort and work," he said."

LOL, but we can send hundreds of thousands of troops and spend a couple trillion dollars invading countries that never attacked us.

That is the weakest argument against a gold standard I've ever heard. I mean seriously? This man is an academic?

[bemac]

More Fed propaganda and lies...

"Oil Prices Spike Exacerbated By Wall Street Speculation, Federal Reserve Study Finds"

http://www.huffingtonpost.com/2012/0...n_1367896.html

If that aint the pot calling the kettle black.

[ralleia]

"Oil Prices Spike Exacerbated By Wall Street Speculation, Federal Reserve Study Finds"

That's the funniest title I've heard on an article in a long while. What a hoot!

[phideaux]

That's the funniest title I've heard on an article in a long while. What a hoot!

It should read "Oil Prices Spike Exacerbated By Federal Reserve Loose Monetary Policy, Wall Street Study Finds."

[pay dirt]

Was it over a century ago that people railed against the Gold Standard as well? There was a movement to make the US on a Silver Standard. Gold is more rare and the banks that hold it would love to go back to a gold standard. It was the banks that pushed for a Gold Standard originally to get off the bimetallic standard that they could not control. How much silver do they hold? A guess is more common folk have more silver than gold. As some here write it often less eloquently, its not at all that rare, which is why it makes for a good stable currency. Its available in a larger quantity than gold, yet it is still a precious metal because of its useful properties. A gold standard is better than a fiat standard which there is now, but a Silver standard tied into it would be even better.