Ben Bernanke just gave the first lecture of his 4-part series on the origins of the Fed.

We'll have full transcripts and slides later, but one thing really stood out ...

He spent a lot of time talking about the gold standard, and he just murdered it.

Among his points:

To have a gold standard, you have to go dig up gold in South Africa and put it in a basement in New York. It's nonsensical.

The gold standard ends up linking everyone's currencies, causing policy in one country to transmit to another country (sort of how U.S. policy now transmits to China, because they've fixed the yuan price to the dollar). So for example, if the U.K. fixes the number of pounds to an ounce of gold, and the U.S. fixes the number of dollars to an ounce of gold, then the pound and the U.S. dollar inadvertently become linked.

It creates deflation, as William Jennings Bryan noted. The meaning of the "cross of gold" speech: Because farmers had debts fixed in gold, loss of pricing power in commodities killed them.

The gold standard tends to cause interest rates to rise during downturns and interest rates to fall during good times, the exact opposite of what monetary policy should be doing.

The economy was far more volatile under the gold standard (all the depressions and recessions back in the pre-Fed days).

The only way the gold standard works is if people are convinced that the central bank ONLY cares about maintaining the gold standard. The moment there's a hint of another priority (like falling unemployment) it all falls apart.

Gold standards leave central banks open to speculative runs, since they usually don't hold all the gold.

Here are the key slides where he talks about gold...

AND READ: Ben Bernanke Explains Why We'll Never See Another Gold Standard >