Gold vs paper money: Which should we trust more?

[dipsydoodle]

A popular solution to the financial crisis has been to print more money, but is there another way of fixing our economy? Would the financial system be more stable if each pound, dollar or euro in our pocket was once again backed by gold?

Brian from Manchester has lost faith in money. After selling his house, he decided to turn his cash into something he says he can trust: Gold.

"I started in 2005 and now I've got £200,000 worth - about half of what I own - in gold.

"If I kept all my money in the bank, the value of my work would either devalue over the long-term or it would be wiped out."

http://www.bbc.co.uk/news/business-18644230

[trotsky]

1. Been there, done that.

Bank runs and worldwide depression were the result.

Even with all its flaws, fiat currency is the best system we have.

[Lefty Thinker]

2. Amen to that

Commodity based money just means that corrective action in cases of demand failure is even harder than with a Tea Party aligned House.

[MicaelS]

3. There is not enough gold on earth

To return to a gold based economy, unless you want the price of gold to be astronomical.

http://en.wikipedia.org/wiki/Gold

A total of 165,000 tonnes of gold have been mined in human history, as of 2009. This is roughly equivalent to 5.3 billion troy ounces.

Then you have to decide what is the total value of everything on earth, and then calculate the value of the gold.