On March 23, 2012, I noticed that Jeff Rense’s site had linked to the mass media article by Reuters, Bernanke says gold standard won’t solve problems, with the editorial title, Bernanke’s Idiotic Lies About A Gold Standard. It is still there as of April 1.
Here’s all the article says about Bernanke referencing the gold standard:
“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,” Bernanke said. “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.“
First of all, a government-guaranteed gold standard — which is what Bernanke is referring to — DOES determine the money supply, since a certain percentage of the money supply is backed by gold, by law, under such a standard. Bernanke is also right that under such a standard, “the money supply goes up and interest rates go down in a period of strong economic activity.”
The money supply goes up because it’s usually only partially backed by gold — up to 40% prior to the last gold exchange standard in the U.S. that ended in 1933. The Roaring Twenties followed by the Great Depression is the best example of this. It was the low interest rates that contributed to the easy-money situation that extended banks far beyond their ability to meet eventual customer demand for their money in cash or gold.
The implication of Rense’s link is that a government-guaranteed gold standard is somehow good, which is ironic, given that he considers the Protocols to be an authentic document, and in that document, it mentions using gold to control economies! (Note: I don’t regard the Protocols as authentic, despite its accurate statements about a gold standard — but he does):
“22. YOU ARE AWARE THAT THE GOLD STANDARD HAS BEEN THE RUIN OF THE STATES WHICH ADOPTED IT, FOR IT HAS NOT BEEN ABLE TO SATISFY THE DEMANDS FOR MONEY, THE MORE SO THAT WE HAVE REMOVED GOLD FROM CIRCULATION AS FAR AS POSSIBLE.”
Was this simply a case of editorial license for the sake of getting thousands of cheap clicks, or does he really support a government-guaranteed gold standard?