Gold Standard?

I took some econ classes in college long ago and far away. Some of the knowledge stuck, but most of it was sluiced away in the act of drinking beer with Bill, a linebacker from Eau Claire.

Thank you Bill for that kindness.

Now, this post is a discussion of fiat money and my take on it. From my point of view, it would appear that fiat money is a great thing provided you are sitting in a resource-rich, reasonably unpopulated world.

Because at the end of the day, fiat money is little different than credit in my mind. The desire to
expand the money supply is the equivalent of taking a loan out because you know that your new job will more than pay for it (or the expansion of your industry will make up the difference when you expand the money supply).

But I think that one of the basic FACTS that we are facing is that we are living in a constrained world. Peak oil is real. Overpopulation is real. The preponderance of evidence shows that global warming is real (I will admit to a little wiggle room here, but not much. I have a sneaking hunch it will not take more than one additional bit of evidence (solar input analysis) to push me over to the "real" designator).

So, in fact, there is not "better job" to pull us out of this one. So we should probably look at this idea (fiat money) as maybe not appropriate for us in the world as it currently stands. Now I realize that there are any number of folk out there who have designed economic systems ab initio to replace the sytem that we currently use, but usually these don't pass the giggle test. For something as important as their money, folks aren't going to go into a re-enactment of potlach economies or carbon sequestration credits. (just remember how well Thermidor went over in the French Revolution...most people need continuity, not radical change).

So in my mind, beer sodden as it is, it looks to me that in the end we will have to return to the gold standard. Oh, I am not like the gold bugs or my idol, the Mogambo Guru, but maybe the inherent constraints of a gold-standard monetary system is better suited to the world of less we will be inhabiting.