Why sound money matters

[Cyclone]

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[noxagol]

Well, aside from actual worth of material, I.E. paper versus gold, the real reason that a commodity backed currency versus a fiat currency is that it is limited. Fiat money would work just as well if the amount was fixed like the amount of money would be fixed if it was backed by gold. You couldn't print more money than there was gold to back it. The problem truly lies in the fact that they print the money up from nothing and never stop. If we prevented 100% the making of new money, it wouldn't be a problem at all. The limiting factor is whats important really. Though, I do like the idea of trading with gold rather than paper, or even worse, debt.

For a while the colonies pre-United States had a fiat currency, but it worked very well because they were responsible with it and only printed an amount that was just enough to encourage trade and that was it. They did not use this money making ability to plug holes in government budgets to funds wars or social programs.

[Cyclone]

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[noxagol]

It is something that I would pass along. It states the problems pretty clearly I think and why sound money is good money.

[Cyclone]

Thanks. That is what I needed to know.