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The danger with fiat money is that it has no natural limit.  Where gold is a product of the natural world and supply is limited, so that in order for a country to debase its currency it requires physical action on the coin, in the case of fiat money, it can be debased by simply printing more and more money.

Of course, the supply of money must have limits.  But those limits should be measured by the amount of human inventiveness, NOT by the supply of ore for a semi-worthless metal like gold.

There are hundreds of GOOD reasons why humanity has (hopefully) left the gold standard in the dim past.  Anyone who would suggest a return to the gold standard has to explain away a LOT of flaws inherent in such a system.  I don't believe it is possible to paper over so many flaws.

As for whether money should be tied in value to oil, I would argue that that is exactly what is happening now.  I would add that money should be valued in energy units such as watts.  This would mean that wind turbines would exist on the same footing as all other forms of energy.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Sat Aug 18th, 2007 at 05:09:19 AM EST
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