[Bubba Ho-Tep]

Of course, the result of having your money strictly on the basis of precious metals means that the money supply can only expand as more metals are discovered, mined, refined and minted. The effect is deflationary as products chase a limited amount of money, people who have money don't spend it (because they'll get more from a desperate seller tomorrow) and counterfeiting becomes more attractive.

[Smile-n-Win]

Of course, the result of having your money strictly on the basis of precious metals means that the money supply can only expand as more metals are discovered, mined, refined and minted. The effect is deflationary as products chase a limited amount of money, people who have money don't spend it (because they'll get more from a desperate seller tomorrow) and counterfeiting becomes more attractive.

That's all very true, but your premise seems to be that deflation is a bad thing. Why do you think so?

[ml/nj]

Of course, the result of having your money strictly on the basis of precious metals means that the money supply can only expand as more metals are discovered, mined, refined and minted. The effect is deflationary as products chase a limited amount of money, people who have money don't spend it (because they'll get more from a desperate seller tomorrow) and counterfeiting becomes more attractive.

First, I disagree with your assertion. Second, we have laws. If people want to change them, there is a way. But that's not how it was done. Why do you think that "quarter" in your pocket has a thin nickel veneer? (Hint: It was so, when they were introduced, the unwashed wouldn't think them very different from real silver quarters. Look up counterfeit.)

The original Federal Reserve Notes weren't legal tender, but were redeemable ON DEMAND in GOLD. FDR changed that. He made them legal tender, and redeemable in "Lawful Money." Now they are redeemable in NOTHING. But you've been talked into thinking this is okay.

ML/NJ