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He’s talking about gold as currency. This makes sense.

Not really. The only way you could increase money supply would be to mine more gold, and gold is really scarce!

As economies grow and populations increase, gold would become more valuable, locking the nation using gold as currency into constant deflation.

For example, take the US dollar. We own about 200 million ozs of gold. That is approximately 300 billion dollars worth at $1600.00 an ounce.

Our M1 money supply is 2.1 trillion dollars. That means that the gold would have to be valued at $11,200 per oz to cover money in demand accounts and on hand cash. Of course, you could devalue the dollar by 85% and accomplish the same thing. This is just based on the M1 money supply.

Our M2 money supply is four times higher.....

Gold backed currency, especially for the US, is a fantasy. That is the reason only RP is talking about it.

Gold backed currency, especially for the US, is a fantasy. That is the reason only RP is talking about it.

The current situation of a currency backed by the government's promises to tax the crap out of our grandchildren on behalf of private banks is even more of a fantasy - in which devaluing the dollar by ONLY 85% will be a fond memory by the time you and I die - yet we're still clinging to it. Who's more delusional, Ron Paul or Ben Bernanke?

As economies grow and populations increase, gold would become more valuable, locking the nation using gold as currency into constant deflation.

This argument has been proven false numerous times.

The fact that we have lived in a perpetually inflating world - and always at the hands of politicians - has made some believe that this is some natural state of things.

The lie that deflation is somehow an awful catastrophe is perpetuated time and again, yet some of our healthiest markets have been the most plagued by deflation.

Look at:

Calculators
Computers
Electronics
Home Appliances
Technology Items

All of the above have experienced drastic deflation, consumers pay a fraction of their launch prices, and prices continue to drop.

A precious metals backed currency is precisely what we had when all of those factories - that now stand in ruins across America - were originally built. Silver and gold backed the dollar, and it even said on each banknote such.

Paper money was only designed as a convenience so that people would not need to carry around actual precious metals... they represented an amount of gold or silver held in a vault that the bearer could demand at any moment.

Our problems started when the politicians took away the gold and silver and replaced it with... NOTHING. That was the robbery of the millenium.

Some of the arguments against an alternate currency are simply silly... that it would somehow be beholden to Islam or somesuch is utter nonsense. The owner of the gold would be YOU. Who actually mints it is no more important than who knits your sweater, once it is yours, it's yours.

Of course, the gold should be accessible to you at all times and NEVER subject to confiscation by a bankrupt government again.

Certificates would be necessary, but were the means to steal our gold and silver - actual gold or silver specie present problems of their own... beyond simply sweating, shaving and drilling, so a reliable system of certificates (banknotes) would be essential.