Your argument is a circular one: you can’t use gold, because politicians are crooked
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Nope. You can’t use gold because there isn’t enough of it, except it can work temporarily in a crisis if the politicians also agree to behave for awhile. Funny that you have to put words into my mouth.
You’re still ignoring my Bretton Woods example. I wonder why?
Here’s the big question. There are multiple countries in the world that use the fiat US dollar to either stabilize their monetary systems, their economies or both. None use a gold standard. Why is that?
I don’t think you understand the Bretton Woods System. It had little to do with a free-market, and wasn’t a gold standard, except that it only tied the US dollar to gold, and then tied other currencies to the US dollar within narrow trading bands. It established the IMF to draw on a basket of currencies, for those economies that were “out of balance”
British economist John Maynard Keynes, who drafted much of the plan, even called it “the exact opposite of the gold standard”
Bretton Woods was a POLITICAL construct, similar to the Euro of today. Of course, once gold started to flow out of the USA due to never-considered economic conditions when the system was established - rather than discipline the USA with the prescriptions gold was demonstrating, Nixon simply pulled the plug on it all. Regardless, we got the 1970’s stagflation (and Jimmy Carter), and super-high interest rates as a result.
Regarding your “big question:” Why do some countries link their currencies to the US dollar vs. gold, silver or something else? Its a reasonable question. First of all, it is specifically countries that have gone through terrible economic crisis - places like Zimbabwe, Ecuador, and at times, Argentina. If it proves one thing, its that humans and politicians will destroy a paper currency. There is never a paper, fiat currency in the world that has not been destroyed.
The only exception is Hong Kong, which pegs its currency to the US dollar. But Hong Kong is a small city, is not a country and it has no resources. To defend its peg, it must keep an incredible amount of reserves - presently at a huge $1.8 Trillion
Other countries, like China, watch the US dollar for strategic and trade reasons - NOT because it gives their internal economy any advantage. The Arabs use the dollar for oil sales because they buy protection from the USA, very simple.
The US is a super-power for many reasons. The acceptance of the dollar is a CONSEQUENCE, not a cause.
Finally, your words: “You can’t use gold because there isn’t enough of it, except it can work temporarily in a crisis if the politicians also agree to behave for awhile.”
Please explain, its a hugely important question. Its the essence of monetary policy, and you merely give it a throw-away line. I’m willing to consider it, but you have to meet me half-way.