Bernanke’s Take on the Gold Standard and the Conceit of Central Bankers

Is there any such thing as the truth? If two people view an incident, chances are you'll get two different versions of that one event. Truth is subjective...open to interpretation, recollection and prejudice. One person's fact is another's fiction.

We raise the topic because Ben Bernanke, Chairman of the US Federal Reserve, is back on the lecture circuit. He recently gave the first of four lectures to the poor kids of George Washington University, giving his version of how the Fed came into existence and what the Fed's purpose is. He also gave his version about the gold standard. Is it a truthful recollection of events?

Before we try to answer that question - giving our own subjective version of the role of the gold standard - let's take a quick look at the bond market.

Bond yields have jumped in recent weeks. When yields rise, prices fall. Many are now proclaiming an end to the great bond bull market, which got underway in the early 1980s.

Is this really the case? We think the bond bubble will eventually pop. But thinking it is happening now might be jumping the gun. Read More