Fact and Comment

摘要

1. Golden Rule; 2. Getting Serious About Syria; 3. This Shield Makes for Sharper-Sworded Pens; 4. Pettily Punishing Public-Spirited Citizen. The federal reserve has made it clear that in order to curb incipient inflation it will continue to jack up short-term interest rates until they reach 3.5% to 4%. The move is misguided. The raising of interest rates in and of itself does not restore soundness to a currency. In the early 1980s prime borrowers had to pay rates $500 that were higher than 20%, yet we experienced virulent inflation. The solution is simple: Our central bank should sell bonds from its portfolio, thereby removing cash from the economy, until the price of gold dips below $400 an ounce. Contrary to what most economists have been taught, gold—for a variety of reasons—is the best barometer of monetary disturbance. Its price quickly tells us if a central bank is printing too much, too little or just the right amount of money.