> Gold is a currency trusted by all, fiat is a currency of force.
> You have to trust that banks or governments aren't going to steal your gold. If you don't trust them you change your dollars back to gold.
> With any currency its value comes down to trust.
Do you see the problem here? The entire argument for the gold standard always goes back to trust of the institution that is promising to exchange paper for gold. There is a long, long history of banks and governments unable to produce lumps of metal when demanded, and that has caused panics and recessions. Even if they were sound but had logistical issues moving gold around and exchanging it.
Again, there is no difference between a piece of paper that promises to be worth some amount of gold and a piece of paper that promises not to mismanage a fiat currency. They both depend on full faith in the institution that made the promise.
> A gold standard allowed people a way to keep their wealth in a durable form in times of low trust with no conversion cost.
If they had the physical gold, there is always a conversion cost. A lot of immigrants use gold as a bank of sorts, and they always lose a few points when they sell and buy back. In a crisis, as we both agree, gold is worthless, or at least worth a lot less as everyone tries to sell theirs for food. Holding paper that should be exchangeable for gold has no more inherent value than a fiat currency.
> It allowed people to "take their ball and go home" so to speak. No governments needed to trust another country's fiat. The money exchanged in trade had a real, verifiable, persistent value.
It allowed people to have a piece of paper with a promise that they could "take their ball and go home" so to speak. No governments needed to trust another country's fiat, they needed to trust they weren't lying about their gold reserves and their management of it. The money exchanged in trade was a promise that it was backed by a real, verifiable, persistent value.
> Whatever excuses the US Government gave for ending the gold standard it still acted unconstitutionally. The government was facing a damaged economy and dwindling gold reserves as people and countries redeemed dollars for gold. The government saw their dwindling gold reserves as a problem instead of a function of a gold standard. This is the same as a casino
The government saw their inability to manage the money supply when it was tied to gold as an existential crisis to the Union. If you were in charge, based on your arguments here, you'd rather let the south secede or win the Civil War than tarnish the reputation of the gold standard. That's a bit more serious than a casino going bankrupt.
> It wasn't a problem with the currency it was a lack of trust in the issuer that the issuer saw as a reduction in "their" money that needed to be stopped. It was never "their" money to start with. It always belonged to the people. The people were just taking their ball home.
And when many of those people tried to take their ball and go home, there was no gold for them to collect. The system failed because the institution was mismanaged, or because there was a panic and they couldn't handle the logistics of moving lumps of metal around. That's the whole reason the world has moved away from the gold standard. I'm not sure how you see the long history of it's repeated failures as evidence that the problem is not the gold standard, but the lack of a perfect implementation of it.
