The supply of paper currencies is infinite; the supply of gold is finite.

The supply of paper currencies is infinite; the supply of gold is finite. This striking contrast provides an excellent reason to exchange the former for the latter.

The gold supply is limited...very limited. According to one estimate, all the above-ground gold in the world totals between 120,000 and 140,000 metric tons. Let's split the difference and call it 130,000 metric tons (about 4.2 billion troy ounces). If you brought it all together and made it into a gigantic cube, it would measure about 19 meters along each side - about three meters short of the length of a tennis court.

 

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Well, paper currencies cannot be printed or supplied unlimited. It seems infinite, but it is not that. It is always based on gold reserves. If the supply increases beyond the threshold limit, inflation will take place, though purchasing power will increase, but it is temporary. The value of currency will go down.

 

You are rite they should be based on the gold reserves but it seems like they are not , thats why we are facing an inflation problem my friend.

 

That would be amazing to see and paper supplies should be based on gold reserves. That way we could avoid the recession in the future.

 

Yeah, for the people that will gain from it, i.e. government and conglomerates. It kills the 'little man.' The currency should be backed by Gold. In it's current state, it's technically worthless, people just still agree to use it.

 

I see no harm to use money not backed by gold. I'm sure there is some long complicated reason for it but it seems if we cut someone out the world would have no more money issues.

 

ya,There may be a lot of reasons for this.First,Most of the lower class folks can not store gold easily.There may be problem of safety.Second,Gold cost is high also.No legal bill is passed to consider gold as a currency.
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The high cost of it would just help to keep inflation down. We're not talking of using gold as currency, which would work, but having the paper money backed by it. Pretty much like an IOU. However much money you have, is worth the face value in gold.

 

The high cost of it would just help to keep inflation down. We're not talking of using gold as currency, which would work, but having the paper money backed by it. Pretty much like an IOU. However much money you have, is worth the face value in gold.
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i agree with you,and if they slow the cost of it,will made the inflation goes up...

 

Do you think that inflation is good for the economy? I have mixed feelings about it.