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Yes, but backing the currency with gold is a bad idea, because it essentially means pegging the currency to something that doesn't react in a reasonable way to the market.  Gold doesn't naturally fall in price when the economy slows.  In fact, it does the opposite, because investors know that the government needs to pump up the money supply and inflate away the recession.  (Gold has traditionally been the ultimate hedge against inflation.)  Speculators played the role of semi-gods -- or, more accurately, semi-Satans -- much more back in the days of the gold standard.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Mar 1st, 2006 at 08:42:44 AM EST
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