Some people like to say that money is the root of all evil. If by “money” they mean fiat currencies printed up at will by central banks they are correct.
Yet “experts” say central banks promote stability. It is practically baked into the Keynesian cake. When you search for central banks and stability, many telling reports and quotations pop up. There is an entire report by the Bank For International Settlements (the central banks’ bank) on the topic. The International Monetary Fund, as well, promotes the idea that central banks promote stability.
But let’s look at this stability they are talking about.
Here is a chart showing the “stability” that central bank created fiat currencies created in the oil market.
As you can see, the dollar price of crude oil has increased 31-times since 1950 and has been incredibly volatile while the price of crude oil in terms of gold is practically the same. As is explained here, “given that perfection in the real world in which we live is impossible, gold comes closer to perfection in preserving purchasing power than anything else because the aboveground stock of gold grows by about 1.75% per annum consistently year after year.”
This post was published at Dollar Vigilante on November 28, 2014.