Ben Bernanke briefed the military on why the Federal Reserve is so important and why the Gold Standard won't work , Peter Schiff responded arguing that " we financed the industrial revolution , in the 19th century we converted America from a nation of farms to a nation of factories on a gold standard " "the entrepreneurs were able everything they did on a gold standard " Peter Schiff added "obviously that's a just a bunch of propaganda by the government , government want paper money they do not want to be on a gold standard because they want to be Santa Claus they want to spend money they want to pretend that there is a free lunch they want to give something for nothing they want the power , Gold puts the power to the people fiat money gives the power to the government so that's the reason they oppose it ....."
Ben Bernanke spins a tale of horror about the gold standard. First, he overstates and embellishes the case. #2 - he neglects to mention the role of government interventions in those problems which did exist (such as the Greenback era). #3 - problems were even worse under the Federal Reserve. For instance, he speaks of inflation when technology made it easier to mine gold. Yes - but what about the ease of printing paper today? Everybody outside of the US knows that the Fed exports inflation wholesale. Lastly, as Peter Schiff mentions, governments back inflationary fiat currency because inflation is good for governments, at the expense of the rest of us.
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