I want to make sure you keep your eyes on the ball, that is, the two basic missions of a central bank. The first is maintaining macroeconomic stability: maintaining stable growth and keeping inflation low and stable. The principal policy tool for maintaining macroeconomic stability is monetary policy. In normal times, the Fed and other central banks use open market operations—purchases and sales of securities in markets—to move interest rates up or down, and in doing so try to create a more stable macroeconomic environment.
The second part of a central bank's mission is maintaining financial stability. Central banks are focused on trying to ensure that the financial system functions properly, and in particular, they want to prevent, if possible, and if not, to mitigate the effects of a financial crisis or a financial panic.

Nearly every aspect of modern civilization has been flattening down except one: money. Minting money is one of the last jobs left for a central government that most political parties agree is legitimate. It takes a central bank to battle the perennial scourges of counterfeit and fraud. Someone has to regulate the amount of money issued, keep track of the serial numbers, ensure that the money is trusted. A robust currency requires accuracy, coordination, security, enforcement — and an institution that takes responsibility for all those. Thus behind every currency stands a watchful central bank.

Indeed, there has long been a strand of thought that says that moderate inflation may be necessary if monetary policy is to be able to fight recessions. Still, advocates of inflation have had to contend with a deep-seated sense that stable prices are always desirable, that to promote inflation is to create perverse and dangerous incentives. This belief in the importance of price stability is not based on standard economic models—on the contrary, the usual textbook theory, when applied to Japan’s unusual circumstances, points directly to inflation as the natural solution. But conventional economic theory and conventional economic wisdom are not always the same thing—a conflict that would become increasingly apparent as one country after another found itself having to make hard choices in the face of financial crisis.

There are many reasons there was higher inflation in the 1970s. But that is a complicated story that deals with much more than tax policies.

The IMF has been encouraging, sometimes even forcing (as condition of assistance), countries to have their central banks focus only on inflation. Europe succumbed to these doctrines. Today, throughout Euroland, there is unhappiness as the European Central Bank pursues a monetary policy that, while it may do wonders for bond markets by keeping inflation low and bond prices high, has left Europe's growth and employment in shambles.

under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth... The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit... In the absence of the gold standard, there is no way to protect savings from confiscation through inflation

Monetary inflation became a thing for the first time since Roman days — a much easier trick with printed paper banknotes than with silver coins — but the effect was the same: the evaporation of “wealth” (which is what money supposedly represents).

The monetary policy of the Central Bank of Nigeria in recent times has continued to focus on achieving price and financial stability for economic growth and development. The persistent inflation in the last one year is an issue of concern.

So: if the chronic inflation undergone by Americans, and in almost every other country, is caused by the continuing creation of new money, and if in each country its governmental "Central Bank" (in the United States, the Federal Reserve) is the sole monopoly source and creator of all money, who then is responsible for the blight of inflation? Who except the very institution that is solely empowered to create money, that is, the Fed (and the Bank of England, and the Bank of Italy, and other central banks) itself?

Almost every Fed chairman in the past 60 years has manipulated
interest rates to brighten the economic outlook for incumbent presidents
or newly elected presidents who won by large margins. The
purchasing power of the U.S. dollar has fallen 94 percent in the past
100 years. The only way you can create inflation is by creating more
money that is backed by the same reserve assets; the Fed is the only
entity that can create more money. Ben Bernanke’s quantitative easing
(QE) programs have pumped billions of unfunded dollars into the
economy, thereby setting us up for massive inflation in the very near
future. If this isn’t a form of financial terrorism, it is incompetence of the highest order.

Q: Who caused the inflation? A: The Chancellor of the Exchequer. Q: How did he cause it? A: By putting a flood of new money into circulation. Q: Why did he do that? A: To prevent the exchange rate of the pound rising last year. Q: Why did he want to stop it rising? A: To keep level with the Deutschmark. Q: What for? A: To make it easier to join the EMS.

In the second half of the twentieth century, the idea became increas ingly dominant that attaining a superior growth rate and thus increased prosperity should be the central objective of public policy.

It would be hard nowadays to find a practitioner who upon being pressed did not confess to two main propositions: the disease of inflation in its modern form is caused by an exorbitant increase in money; and, secondly, that increase is caused by governments borrowing from the banking system in order to cover excess public expenditure.

I refuse to start from the assumption that the role of monetary policy is to control and stabilize inflation. The only acceptable way to start is, I believe, to think of the goal of monetary policy, together with fiscal policy,as the maximization of welfare.