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Originally Posted by jaamkie  I'm curious- does it make any sense to you to tie monetary policy to the amount of a few particular metals dug out of the ground in a given year??? I don't know if the current system is optimal, but I certainly wouldn't want to go back to money creation driven by the mining industry! |
There were drawbacks but at least it was dependable, predictable and harder to manipulate.
It's hard to counterfeit gold money. It has real value directly connected to the physical labor it took to dig it out of the ground. It's harder, but not impossible, to control the supply of it.
On the other hand, the current system of fiat money is easily manipulated by greedy bankers and power hungry politicians.
The bankers get to charge everyone interest to use their paper money, and the politicians can keep their constituents happy by enacting welfare programs and paying for them with the extra paper money, instead of increasing taxes. This is called inflation. It's also known as the "hidden tax" because the people end up paying for it in the long run in the form of loss of value of their savings.