Quercus Robur wrote:(not an economics person)
Ultimately fiat but based on the most rational system for its maximisation which I should think would be what corresponds most closely to a system that satisfied our needs most effectively. Wouldn't basing it on a commodity be a bit dangerous - what if we outgrew the commodity? Also our needs are not satisfied only by commodities and basing the whole system on one would push people into consuming more when they might be consuming more efficiently instead
I gather that's what happened in 1971 - there wasn't enough gold to cover the amount of money in circulation. De Galle had been buying up gold, and for some reason, thought it would be cool to arse about with the international system. The Swiss immediately said they'd change to a silver standard, but most countries just chucked in the towel.
By today's standard, in order to use the gold standard, gold would have to be increased to about $4k/oz, I think
I'm not convinced fiat is the way to go. With what is it being backed? The ability to pay taxes/debt? The US is having some trouble in that area now, isn't it?
“There are a terrible lot of lies going about the world, and the worst of it is that half of them are true" - Winston Churchill