Has I have explained in an earlier blog post , Bob Hetzel has suggested that the central bank should target market expectations for inflation based on inflation-linked bonds (in the US so-called TIPS). Admittedly, a gold standard or for that matter a currency board set-up, reduce monetary policy discretion to a minimum. Under this Fisher-Hetzel Standard the Federal Reserve would announce that it would buy or sell gold in the open market to ensure that 2-year/2-year break-even inflation is always at 2%.