From gold standard to no standards and inflation at the speed of light


In one of my previous posts, Is the stock market spring-loaded?, I coined the phrase Lightspeed Inflation in reference to the price pressures created by the breathtaking rate at which the government is now able to float new currency. It's time we stopped referring to the government's overspending as "printing money," because they don't really print much of anything anymore. In the electronic age, all it takes is a few simple keystrokes and -- blip -- another $7 trillion has been put into circulation.

Call me old-fashioned, but I'd actually prefer if the Federal Reserve did have to run the presses and slay trees every time they engaged in another round of "quantitative easing" (although I'm sure the environmental movement will have my head on this one). At least then they might exercise a little more discipline. In 1974, the year I started college, we went off the gold standard. Prior to that time we required ourselves to maintain the precious metal in sufficient supply to back up our currency. Now we just have flashing numbers on a screen backed up by the word of politicians. It reminds me of a cartoon I once read with the caption: "Our standards are very high. We even have double standards."