[DannyTN]

Really, really, stupid idea. Besides, it's not like you can't buy gold or pay in gold now. It's just nobody wants to.

Fiat money under the Federal reserve has been considerably more stable than the gold backed dollar of the 1800's.

Yes, you read that right! The fiat dollar has not been as good of a long term store of value. So if you're goal is to hoard wealth in your wall or mattress for 100 years, then metal will serve you much better.

But if your goal is currency stability, so that the business engines of wealth creation can perform well, the fiat dollar has significantly outperformed gold.

Goldbugs point to the dollar having lost 70% of it's value in 80 years. But did you know the gold backed dollar did that in just 3 years? The gold backed dollar saw inflation as much as 25% in a single year, and years with deflation almost as bad.

Since the great depression, we've had almost no deflation. And inflation has been relatively moderate most years, far better than gold's performance.

Of course with the Fiat dollar, the year to year changes are always going in the same direction, a slow march of inflation. That does mean the dollar is not a good long term store of wealth. But it's far better than gold for year to year business decisions and economic stability.

[bert]

-—But did you know the gold backed dollar did that in just 3 years?-—

Which three years?

[VegasCowboy]

Goldbugs point to the dollar having lost 70% of it's value in 80 years.

Good points. And, if one's cash was earning a market rate of interest over that 80 year period, my guess is that cash didn't lose a dime in purchasing power. My back-of-the-envelope calc shows you'd only have to earn an average of 1.50%/year to break even.