Arjay, though you may dislike them, debt and taxes are not negatives; they're essential processes, unlike gold which is just an expensive luxury. Debt, along with government spending, puts money into the economy, enabling it to work, and taxes take it out again.

The whole system is not doomed to failure. But a gold backed system would be doomed to failure when gold supplies run out.

Inflation rates are low in western economies so your argument that it's killing them is just silly.

<< we get taxed to pay back debt on money that should be ours in the first place.>>
As I said earlier in the thread, your pronouns make it appear silly. If you rewrote it without them then it might help you understand why we pay ourselves interest on the money we borrow from ourselves.

Arjay, one of the questions you regularly fail to answer, is the simple "why should gold - a mineral, dug out of the ground like so many others - be an appropriate currency in the twentyfirst century"?

What is it about gold-as-currency, apart from a nostalgic feeling that things were so much better when we traded in doubloons, that you admire so much?

After all, we measure its value predominantly in paper money, do we not...?

Aidan It would appear that you believe that the current economic system can continue ad infinitum. If not will you tell me why it is going to crash and of course I would like you to add when.

A Gold backed system is most definitely not doomed to failure. But Gold is probably not the only solution. We have to settle on a system that has Automatic controls on the creation of credit aka fiat money printing. Finally Gold is not only an expensive luxury, it, or something with the same properties, is essential as an independent controller. The reason that we get such wild variations in the prophecies for the US$ value for Gold is very understandable if you treat Gold as stable and the US$ as varying by the amount of unbacked credit printed by the Fed Reserve. The real value of the US$ is highly variable in the long run when a reasonable interest has to be paid on the trillions of new US$, and it will be seen that Gold has always bought the same amount of basic services that it always has.

Please do answer the question of whether you really believe the present system can continue and if you do is there any limit at all to the printing or will they just continue until they run out of paper or perhaps ink?

Dickybird, that is simply tosh.

>>Gold has always bought the same amount of basic services that it always has<<

An interesting conjecture. More of a slogan, really. But certainly erroneous.

An ounce of gold in Elizabethan England would make five angels (80 grains each), the most common coin of the era, and be worth two pounds ten shillings. And for two pounds ten shillings, you could pay a labourer's wages for six months. At today's minimum wage of $640.90 per week, six months would cost you $16,663 - eleven ounces of gold.

Slogans are fun, of course. But they should not be used as a substitute for thinking.

Thank you Pericles for the comment but you are really only pointing out that in the terms of a fiat currency in vogue Gold is very cheap and a laborers wage is vastly overvalued. Or possibly in Elizabethan times labor was very cheap and Gold very expensive.

This is not a valid comparison

Dickybird, there is no economic reason why the current system can't continue ad infinitum. It may eventually be replaced with something else for political reasons, but if that happens, that something else will not be gold related.

A gold backed system can not succeed when the gold runs out, therefore either it's doomed to failure when that happens or threatens to happen, or government make the people materially worse off to prevent it from happening (with the poor inevitably hit the hardest). I regard all those outcomes as failures.

We have to AVOID settling on a system that has AUTOMATIC controls on the creation of credit. We need to retain control so we can react to events. We need ACTIVE control, not ultra-expensive passive control!

And if you look at e gold price in the last twenty years, you'll see that it hasn't tracked the cost of basic servioces at all. Even the US dollar is more stable than gold!