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<p>[QUOTE=&quot;johnmilton, post: 4409851, member: 101855&quot;]Backing money with precious metal is not an effective strategy. All it can do is put a limit on the amount of money can be in circulation. That can be a good or bad thing. Having too little money in circulation can choke the economy. Having too much can result in in flation.</p><p><br /></p><p>Being able to convert paper into silver does not fix anything. It does not stabalize the value of the dollar. Economists call it &quot;the commody theory of money,&quot; and it&#039;s not valid. If the dollar is worth more than the silver you can get for it, no one will convert it. If it&#039;s worth less than the you can get for it, people will rush in to redeem it.</p><p><br /></p><p>That&#039;s what happened in 1969 when coin dealers were paying a premium for all silver certificates and redeeming them. Some foolish people held on to their worn silver certificates because they were going to &quot;rare&quot; given all of the redemptions. They didn&#039;t become &quot;rare.&quot; Their value only fell back to $1 when you could no longer redeem them.[/QUOTE]</p><p><br /></p>

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