If you think using gold, silver, or some
other precious metal will prevent debasement of the currency, then you
do not know history. All precious metal does is change the METHODS of currency
debasement, nothing more; it does not prevent it. Let me explain...
in Ancient Rome, copper was a precious metal. The Romans used it in
their money, the As. After all their foreign adventurism and burgeoning
social programs at home, they ran short of money; they needed
to-gasp-PAY for all their government boondoggles! So what did they do? The HALVED the amount of
copper in the As, thus DOUBLING the money supply overnight. Using a
precious metal didn't prevent debauching the currency; it merely changed
the methods employed to do so.
The same could
happen if we had our money still backed by gold or silver. Also, the same
could happen if we used nothing but gold and silver for our money. If
we were using gold and silver to back our paper money, all that would
need to be done is reduce the amount of gold and silver backing each
bill out there. If we were using gold and silver as money, then we
could simply do as the Ancient Romans did; we could simply reduce the amount of gold and silver in our money. In either case, the money supply is expanded, is it not? Can gold, silver, or other precious metal prevent debasement of a nation's currency? No, it cannot.
and silver aren't any more 'honest' than paper money. That phrase,
'honest money', really burns me up. There is no such thing as honest
money! The form that money takes isn't important. What is important
that those administering the money supply do so with honesty and integrity. THAT is
the key, the key that everyone forgets. Since we have a bunch of
crooks in government (including those administering the money supply),
we will have crooked money-no matter what form that money takes.