Professor Bernanke Rails Against Gold StandardSubmitted by emalvini on Tue, 03/20/2012 - 21:17
Professor Bernanke Rails Against Gold Standard
Federal Reserve Chairman Ben Bernanke headed back to the classroom Tuesday, and defended the Fed against its most outspoken critic, Ron Paul.
In a lecture otherwise about Fed history and the Great Depression, Bernanke devoted four slides to discussing "problems of the gold standard."
For years, Congressman (and now presidential candidate) Ron Paul has argued to abolish the Fed and revert back to a system where U.S. dollars can be redeemed for gold.
The United States abolished the gold standard in 1933, and fully moved away from a fixed exchange rate in 1971. Bernanke defended that decision Tuesday, saying a gold standard creates an "awful big waste of resources."
"To have a gold standard, you have to go to South Africa or someplace and dig up tons of gold and move it to New York and put it in the basement of the Federal Reserve Bank of New York and that's a lot of effort and work," he said.