Perhaps ever fearful that the world is on the verge of realizing that, not only can it live without central bankers, but that central banks are destructive of liberty and should be consigned to the dustbin of history, Kansas City Federal Reserve President Thomas Hoenig made this shocking statement on Wednesday:
- “The gold standard is a very legitimate monetary system,” Hoenig said, adding: “We’re not going to have fewer crises necessarily. You will have a longer of period of price stability or price level stability, but I don’t know that you’ll have lower unemployment, I don’t know that you’ll have fewer bank failures.”
Price stability? Imagine a world where savers didn’t have to fear that their own government would actively endorse central bank policies that, as a matter of deliberate policy, steal the value of their savings by inflating them into nothingness. Imagine a world where three dollars bought the same gallon of milk now, and 20 years from now. Better still, imagine a world where prices for goods and services actually fell, in recognition of increases in productivity that made goods more available at lower cost. and where this productivity gain wasn’t also routinely stolen by the central bank.
I guess the Fed wants to be in charge of the gold standard when it is finally reintroduced. I think we can prevent that, and I’m certain we can live without it.
But, price stability? Where do I sign up?