I've just read a LinkedIn post saying the dollar is on the precipice of total devaluation, it's a Ponzi scheme, etc. The only solution is commodity-backed currency--gold, and in the modern world, bitcoin, whose commodity is the energy needed to calculate the complex number that is the "coin."
The peril for the economy and the dollar is real, but gold won't solve it. Here's my answer to that post:
I've hesitated to respond, but such overwhelming ignorance of money and its origins really is worse than any potential reckoning for fiat currency (which clearly will be blamed, even if it's not the culprit).
First: The assertion is that only commodity-backed money has any value. (Energy is Bitcoin's commodity). David Graeber's Debt: The First 5,000 Years says we've had gold-backed money for only 200 years in the last 5,000, or since money has been around. So the other 4,800 years of economies were all a bust? Please, tell me another.
Why aren't FDR and Lincoln taking the US off the gold standard to fight the wars mentioned? And what about "Cast Away"? Would the guy stranded on a desert island still find dollars, or gold, or bitcoin valuable? The society providing the resources for which currency is exchanged gives money its value; the rest is baloney.
Second: There has never been economic money without some authority (state, temple, king, etc.) to require it in payment for taxes. The Confederate States of America can't collect taxes, so its money is valueless.
Third: Because they are limited, commodity-backed currencies covertly favor deflation. Remember the Great Depression? Deflation! Political economist Mark Blythe says we can have either gold-backed money that leads to an oligarchy or democracy, not both.
What's shameful is how much credence this inexcusable deception receives.
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