Academic economists since John Maynard Keynes have mocked the classical gold standard, but when government implemented their system, we got inflation and destruction of the currency. Time to rethink the success of that gold standard.
The "experts" solemnly tell us that deflation is even worse than inflation, and that deflation always will lead an economy into recession. The truth turns such "wisdom" upside down.
Despite assurances from politicians and the media, the Federal Reserve System is not a collection of geniuses who stand guard against inflation and recession. Instead, think of the Fed policy makers as the Keystone Cops of central banking.
Central banks, and especially the Federal Reserve System, continue to churn up inflation and the boom-and-bust cycles—in the name of "stabilizing" the economy.
While the usual characters praise central banks for supposedly bringing economic stability, Dr. Shostak explains that their presence makes things unstable because they break the relationship between saving and lending.
Keynesian orthodoxy claims government can successfully counter recession through "expansionary" policies. To the contrary, these policies increase the danger to the economy.
The success of Japan after WWII was due entirely to low taxes, an appreciating currency, and a very high personal savings rate. That all changed when the bubble was born in the late 1980s.
Contractionary monetary policy may be necessary to slow the rise of inflation, but the recessionary results of this remind us why the Fed's inflationary policy is so dangerous.
In spite of what they say, governments will do nothing about inflation. Even though "money printing" is the real cause of this, governments will just keep blaming red herrings like supply chain problems.
