Shostak critiques Bernanke

In a long column addressing a speech Fed chairman Ben Bernanke gave at the Economic Club in Washington, D.C. on December 7, Austrian economist Frank Shostak concludes with these remarks:

Bernanke: "Our regulatory structure requires a better mechanism for monitoring and addressing emerging risks to the financial system as a whole." He goes on to say he favors the creation of a "a systemic oversight council, made up of the principal financial regulators, to identify developments that may pose systemic risks, recommend approaches for dealing with them, and coordinate the responses of its member agencies."

Shostak: "We suggest that the threat of future crises will disappear once the Fed stops tampering with interest rates and the money supply. Furthermore we suggest that the act of money creation out of thin air is going to disappear once the present paper standard is replaced with a gold standard. If we allow a market-chosen money to fulfill the role of the medium of exchange, the issue of inflation will also disappear."