How important is it
to have gold backing of the currency? What is essential when
controlling the value of currency is budget control and debt size.
What about relying on gold as a backup? The ability to buy gold with currency, or free conversion, is a deterrent to reckless spending but chances are, the value of gold used may not be the true market. The cost of other items may also come into play.
Paper money with no gold backing would be o.k. if very strict controls on budget were in order. Those would have to be safeguarded from political influence, and that can be more easily discussed than put into practice. (See the Earl J. Weinreb NewsHole® comments.)
What about relying on gold as a backup? The ability to buy gold with currency, or free conversion, is a deterrent to reckless spending but chances are, the value of gold used may not be the true market. The cost of other items may also come into play.
Paper money with no gold backing would be o.k. if very strict controls on budget were in order. Those would have to be safeguarded from political influence, and that can be more easily discussed than put into practice. (See the Earl J. Weinreb NewsHole® comments.)
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