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Originally Posted by fionnmccool  Isnt' the value of gold still subjective though, just like anything else ? If gold holds its value then isnt' there less incentive to invest it's value in anything else ? |
The advantage is supposed to be that while gold's
value is itself a form of fiat value - in that it is sustained only by belief in its value - the limited supplies of it mean that a government cannot simply print more.
That doesn't prevent capitalist economies from blowing up, or governments from going into debt, of course, since both those things happened at regular intervals throughout the history of metallic-standard currencies. In fact, bar devaluation, it's hard to think of anything it does prevent - and devaluation can be prevented by the rigid currency pegs that are part of the gold standard system, without actually having any reference to gold.