Minutes 28-30, Ron Paul explains how a gold backed currency would make it near impossible for governments to go to war. As I continue to investigate the historical facts as opposed to the falsehoods we are told about war, I continually see that war has nothing to do with cultural or any other kinds of differences between people and everything to do with the controllers of our banking system furthering their control over the people. While ideally, I'd love to see a fiat money system as promoted by AMI, Bill Still, Dennis Kucinich and Ellen Brown it would still put too much power in the hands of government and make it too easy for government to increase it's power by taking us to war.
Yeah, the main problem of a gold-backed currency, though is there is no gold in Ft. Knox. And even if we had as much gold as China or Europe, it's still a finite resource, so it can't keep up as our economies grow.
For a fiat currency to work properly, it must be printed in direct proportion to the actual goods and services being traded. This is nothing like the current system the Federal Reserve uses to print money from nothing, with built-in debt.
You are correct, Wendy, in your observation that this gives a lot of power to the government. Until we have a government we can trust not to manipulate the money supply, we may be no better off switching control from the Fed to the gov.
There's always silver and copper too - anything of real value will do. The national government doesn't have to be in the business of minting money. When local governments and private mints can do that, those that are most honest about truly backing their currency with something of real value will get used most. I do agree however that government would certainly have an important role in preventing fraud in such a world - fractional reserve banking has got to go. Liberty dollar made a ton of copper $1 Ron Paul peace coins back in 2007. I had a bunch on order when all the trouble started for them.