I think to be fair the Federal Reserve after its foundation in 1913 has essentially always pursued relatively expansionary monetary policies with one exception that stands out and that was the period Paul Volcker 1979-1980 when he pushed the discount rate to over 20%. A very courageous move I may add; but in general if you look at the price level in the U.S. in 1900 compared to 1800 and you look at real per capita increases between 1800 and 1900, then I have to say that the economic expansion under a gold standard essentially in the 19th century was stronger than in the 20th century when the Fed was in existence.
And what happened is in the 20th century the price level as you well know and as everybody knows has gone up dramatically in terms of how much it costs you to fill the tank of your car.
How much a movie ticket costs, how much a pound of bread costs, and so forth and so on. And so really the policies of the Federal Reserve have always been inflationary.
And I would say every central bank that essentially has the control of over the quantity of money will in the long-run ensue inflationary policies. Maybe temporary, occasionally, they tighten the monetary policies, but actually in the U.S. we didn't have tight monetary policies now for 10-20 years.
