It is a sobering fact that the prominence of central banks…
![“It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less. [I]f the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency…” quote by Paul Volcker](https://sms4smile.com/q/i/1ab/paul-volcker-37701_banking_it-is-a-sobering-fact-that-the-prominenc_1339309.jpg)
“It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less. [I]f the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with 'free banking.' The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy.”
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
Central banks have become more prominent, yet inflation has risen; past systems like gold standards limited money creation and curbed inflation.
In simple terms: More central banks, more inflation; past systems limited money creation.
Key Takeaway
Consider limiting money creation to control inflation.
Themes
monetary policy
inflation
central banking
historical comparison
Mood
cautious
analytical
Type
economic
historical
policy.
When to use this quote
- policy debates
- academic research
- central bank strategy
- inflation targeting
Key Concepts
money creation
price stability
gold standard
free banking
Questions to Reflect On
- How does money creation affect inflation?
- What alternatives to central banks could ensure price stability?
A Different Perspective
Historical gold standards also restricted economic growth and flexibility.