Wednesday, May 2, 2012

The Real Reason Ben Bernanke Resists the Gold Standard

The fact that the chairman devoted substantial time to the subject suggests that the idea of a new gold standard is gaining traction and that some public rebuttal was required. That's interesting because for decades mainstream economists of the Bernanke type have disparaged the role of gold. If a new consensus is emerging that gold has some role to play, this is a threat to the beliefs of Bernanke and others such as Paul Krugman who take the view that money-printing capacity is essentially unlimited.

Bernanke's public attack on gold comes down to two propositions, both demonstrably false...

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