[TexasRepublic]

In the last 5,000 years mankind has failed to devise an economic system that is recession/crash proof. Even though you can't eat gold or most other units of value storage/exchange except food itself, that 5,000 years of history has culturally conditioned most people across cultures and times to expect gold to be a more likely unit of worth than say, paper. I have money from two defunct regimes: a 10,000 Mark 1922 banknote from the Weimar Republic, and a gold 20-Franc Napoleon Bonaparte -- now which would YOU most prefer to have?

I suspect that a backed currency could not be as rapidly or radically manipulated as an unbacked currency.

Granted, gold or silver does not pay dividends or seem like a good a good investment right now, but if our faith in the almighty dollar ever vaporizes completely like the Weimar mark, a few gold or silver coins might get you out of a "tight situation" quicker than a pile of worthless paper.

[CobaltBlue]

>>a few gold or silver coins might get you out of a "tight situation" quicker than a pile of worthless paper.<<

So it's a hedge. That makes sense. But you don't use it to pay your mortgage nor buy your groceries nor pay for gas in the real world absent that "tight situation," because with gold, you always have to haggle, unless it's a gold coin, and even then there's always sweating, clipping, and for large payments, hiring a guard.

And when you start talking about gold backed paper money, then you aren't any better off in that "tight situation," are you?