Monday, November 17, 2008

Gerald P. O'Driscoll, Jr. Advocates Gold Standard

Gerald P. O'Driscoll, Jr., previously of the Federal Reserve Bank of St. Louis and now of the Cato Institute, has an excellent article in today's Wall Street Journal. O'Driscoll writes:

"Mr. Obama needs to stop the next asset bubble from being inflated by imposing a commodity standard on the Fed. A commodity standard (such as a gold standard) imposes discipline on a central bank because it forces it to acquire commodity reserves in order to increase the money supply. Today the government can inflate asset bubbles without paying a cost for it because the currency isn't linked to the price of a commodity."

The Federal Reserve Bank has become a barbaric relic. It is time for Americans to think about adopting a civilized alternative to the Fed's barbarism: a gold standard.

No comments: