Why dont we use gold and other precious metals as CURRENCY?

Question

If we went back in time, to 1950 and started using coins with gold/silver in them that matches the face value printed on the coin.

Would we still have inflation?

Is this feasible?

Answer 1

I never thought about it, but I dont think so. The value of a coin is not taken from say, how much copper one would find in the penny. It is purely conceptual. Money is only valubal because it has been specifically stamped, we could just as easily   be using wood coins and I dont think it would effect inflation.

Answer 2

You would create a stable currency . There would be no way for { for lets call it stealing } creative financing .

Answer 3

you are exactly right, and that is the problem, its smart! have you noticed that whatever is smart, the worlds leadership doesnt do?

Answer 4

Simple answer: not enough is available. Some currencies follow the gold standard, but using precious metals as currency just isn't feasible in our time.

Answer 5

we don't use it cuz we would run out all of the gold and we also use it for jewelry, plus the government prints out the money and i guess think it a more efficient way and easier

Answer 6

Here is the biggest problem to using Gold/Silver as our currency. (Our Trade Deficit).  As we import more than we export, we end up exporting our currency. Since Gold/Silver cannot be created without digging more out of the ground, eventually you'd have no money left within the US economy to run, as we would have exported our money to foreigners.

A fiat money system is the best when you have global trade. The only downside to fiat money is inflation will NEVER go away. All you can do is best limit the inflation to the smallest amount possible.

Gold makes sense in a closed economy that has no external trading. But in the 21st century of global trade, using gold as your currency is a straight shot ticket to poverty.

Answer 7

Who decided gold was so great? Because it doesn't rust and it shines? Representative value has always been a part of the money system (idea). The only things that have comestible value are food and water (also a little awkward to carry around and trade).

Answer 8

coins would get very heavy!

Answer 9

In olden days people were actually using silver and gold coins.The gold dollar is popular.During british times in

India we were having silver rupee coins.The value of silver inthose days was one rupee for 10 gms.In our house my mothe colllected some and kept in God's pooja room.

Afterwords when the value of silver went up all people started melting them and get more value.

The currency notes we use are actually backed by eqivalent of gold in the banks.You may go to Fort knox in UsA and see the gold stored there.If the government prints more notes than the equivalent of gold inflation sets. in .Also the currency strength depends on the productivity of a country and hence the buying power of the currency.The currency of poor countries is not recognised because they neither have gold backing or productivity.

In a lighter angle swindling and mugging will increase if we carry pure gold.

When we used nickle in some small coins and also brass people started melting them for   the matal value which is more than the face value of the coin.