As the Senate confirmation of Judy Shelton, one of President Trump’s nominees for the Federal Reserve Board, begins, her past advocacy for a return to the gold standard (and a new Bretton Woods to be held at Mar-a-Lago) is coming under scrutiny. Unfortunately for gold-standard backers, their preferred monetary regime is not a guarantee of price stability — one of the key mandates of the Federal Reserve. Even worse, it has often turned recessions into depressions, making life enormously difficult for those below the median income, as Milton Friedman famously demonstrated.

First, history has shown that governments have a tendency to manipulate a gold standard with adverse inflationary effects.

Consider the example of President Franklin D. Roosevelt, who on April 5, 1933, ordered all gold coins and certificates of denominations in excess of $100 to be turned in for other money by May 1, 1933, at a set price of $20.67 per ounce. In 1934, the government increased its price of gold to $35 per ounce, effectively inflating the value of gold denominated in dollars on the Federal Reserve’s balance sheet by nearly 70 percent. This action allowed the Federal Reserve to increase the money supply and led to significant price increases for consumers.

Contrast that period of inflation with the remarkable price stability over the last 30 years since the Fed adopted an inflation target.