2009-01-08, 01:24 PM
Harrisonized Wrote:The economy is based on gold. All your paper money represents existing gold somewhere. Since money is always inflating, gold is really the only way to keep up with the inflation. However, if you look at it this way, gold's price isn't going up, its the money's value going down.
That's not correct.
Gold-based currency USED to exist in the States and elsewhere. However, it became cumbersome and useless to deal with. People exchanged the paper notes without exchanging gold. The gold rotted in Ft. Knox. The economy as a result was HELD DOWN by this.
Eventually paper currency became non-gold-based. Right now, the legitimacy of the United States is the guarantee behind your paper currency. This allowed the economy to thrive more htan when paper currency was tied to gold.
What I am saying is straight out of American history class. If you do not believe me, go a local bank, preferably where you have a savings account, and ask a banker about what I am saying. They will know a lot more about economics and currency flow than I do, (I admit I don't know that much,) but virtually no banking professional will claim that our currency right now is tied to gold.