This business of gold currency remains one of my few minor quibbles with Rand’s worldview. I admire objectivism on the whole, but to me it seems that gold is every bit the fiat currency as anything else. As any currency must be. Its value is merely a perception of our expectation of use in future exchange. You can’t eat it, or make a decent sword out of it. Its intrinsic value has practical limitations. The value as a medium of exchange based on our expectation that it will continue to be valued by others, is what makes it work.
Of course as a currency it has the benefit that it is slow to grow in supply and therefore hard to suffer inflation, unless a nugget the size of Vermont is discovered somewhere... then all bets are off. :-)
The size of the economy, our real GDP and by extension the money supply needs to be able to expand as productivity expands, not as a function of how much shiny yellow metal we can dig up out of the ground.
I’m not an economist and I don’t play one on TV but that’s my .02 (in gold, if you please) on the gold standard.
:-)
No one requires you to accept gold in exchange for anything. So far as I know no one ever has. You are required by law to accept US currency in the US for any debt owed to you or in exchange for any goods or services that you offer for sale here. If the US disappears from the world scene, US currency would be worth absolutely nothing. Those little gold and silver coins stamped out in US mints, however, would continue to be worth approximately what they were always worth, more or less, because all the mint was doing was certifying the weight and fineness of the metal in those discs.
ML/NJ