Sure, I agree a commodity-backed currency would slow the rate of printing.
But economics is a very strange thing. There are no experiments. We can now say that the value of what the USA does and has in a month or so is worth more than all the gold in the world, with gold priced at or around its free market commodity-worth value.
The same was not true 70 years ago. So is it not true that the US is much richer in any measurable sense than it was 70 years ago? And all this wealth occured under a managed fiat currency.
I mean maybe it would have been the same under a backed currency, or maybe better, we’ll never know because there are no reruns in economics.
But I think there’s a pretty sound argument to say that backing a currency with a limited commodity could hold back its wealth potential. I’m not sure, but it seems pretty reasonable.
One argument for an inflation-based economy, is that it forces people to put their money in banks so they don’t lose money, so then that money is invested. Again, I’m not entirely comfortable with anything that includes the word “force”, but it seems that a pretty reasonable argument could be made that it’s a working model.
I don’t even understand fractional reserve banking though, I don’t honestly know what the heck is up with that.
In a nutshell, I’m not sure. I know we are richer now than we were. Would we have been this rich anyway? I’m not sure.
That is a tough notion but if the value of the paper and the value of the commodity rise simultaneously with the net wealth, all remains in balance with a net deflation rather than a perpetual inflation. When we were on a species standard, prices did not rise yet wealth grew.
Government interference in health care, warfare, energy use and fiscal growth may just cause an unwarranted imbalance in the market.
Not saying I'm right, just that what we are doing isn't working well and the old way seemed to.