So what, we go back to the bartering system? It's difficult to trade my skills as a programmer for food directly.
Not sure what the rest of your statement is saying...
@21echoes covers everything else I wold add on this.
The US currency used to be backed by gold up until 1934 [1], as did several other countries[2]. But as times have moved on, there are several other minerals which have become more important, I think it would become too difficult to rely on just a single precious metal these days.
[1] http://www.federalreserve.gov/faqs/currency_12770.htm [2] http://en.wikipedia.org/wiki/Gold_standard
Whenever I come across the argument that we return to a gold-backed economy, this is among one of the first things that comes to mind. Gold is worth so much because it's considered a precious metal and has numerous uses in industry. But besides the extensive history of its worth throughout the ages (which probably maps well to its chemical attributes, such as malleability), there's nothing that suggests it won't eventually become worthless if civilization values something else (salt, platinum, clean drinking water).
I used to think I was a little crazy whenever I'd have such an argument with my inner monologue, but now that I see the same point raised by others, I'm not so sure.
Maybe I still am crazy.
Weimar, Austria, Zimbabwe, Argentina... It's a long list of 20th Century, central bank, paper induced economic disasters: http://en.wikipedia.org/wiki/Hyperinflation
Can you find any hard-money regimes like that?
Did it never strike you as odd that when the robber barrons were deposed by the class of disenfranchised oligarchs they were awarded the Federal Reserve as compensation.. Yes they were quite pleased.
6000 Years of Debt is a book that can be recommended for information about that. It is not a very good description of the present, but it captures the past very nicely.
I've read several different theories of money and I don't find the debt vs coincidence-of-wants bifurcation that Graeber alludes to such a big difference in practice.
He pretty much hangs his whole approach off of that, but the two can be reconciled quite easily in my mind.
I wish everyone would read David Graeber (first) and then Detlev Schlichter.
Another obvious problem: if we pin our money supply on gold, what happens if we find an asteroid made up entirely of gold - enough to triple the quantity of gold on earth? The person who grabs that gold now owns the whole planet and the entire economy is ruined, even though no actual production has occurred.
As with democracy, paper money is the worst possible system except for every other system anybody has tried.
[1] http://www.theatlantic.com/business/archive/2012/08/why-the-...
Nevertheless if that's the road you want to go down then the impact on Spain from it's South American conquest is an example from history that somewhat parallels your asteroid of gold.
And yet where Spain's experience serves as a warning we have to look to the modern central bank and revolutionary France in order to gain a true glimpse of what unfolds when a single entity has in it's possession an asteroid of money. Paper money imposed imposed by fiat.
Subjectively in the opinion of many, gold fails in one aspect that is essential to a functional money in that it lacks what would generally considered a wide demand for "useful" applications. The subject value bestowed on it for being yellow and shiny is hardly considered a virtue but perhaps that says more about the human condition than gold? It does however satisfy the remaining requirements of a money very well. It's detractors in favour of paper should perhaps ask the same questions of their beloved wood pulp and see if it doesn't come up short.
The Atlantic article, is in my opinion weak and childish. I don't blame you for opinions, they are inevitable conclusions reached my the majority of bright minds educated by the system. Having been a successful CFA candidate I'm readily familiar with all the received "wisdom".
If there is one reason I would hope might persuade someone to reconsider the validity of the economic consensus if it would be the fact that I can assure you that if you do a little digging you will discover that the architects of the fiat, paper, fractional, central banking system; certainly agreed with me rather than you.
The reason today's system is so fragile is the their progeny have by and large bought into the economic snake oil that poured through education system to justify their monopoly.
