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<p>[QUOTE=&quot;NorthKorea, post: 2495155, member: 29643&quot;]No. History has shown that fiat helps increase productivity by allowing the efficient transfer of wealth between entities. If we had a purely gold backed currency, which was somehow never destroyed nor created, the relative value of G&amp;S would stagnate. Since any increase in productivity would result in a complementary decrease in price per unit sold, you&#039;d create a purely economic driven monetary model. Individuals would be given incentive to actually decrease productivity. After all, they&#039;d get paid the same amount in currency regardless of the amount they produced, since all goods would be treated as commodities.</p><p><br /></p><p>Personally, I understand the rationale behind government consumption of overstock, but that *should* be used as a short-run stabilizing control, not as a long-run consumption model. If the government always consumes the excess production, you create incentives to improve productivity of the specific good, as opposed to transitioning to more affordable alternatives. Overall technology becomes bottlenecked, as money is directed to the most profitable sectors, whether due to artificial/induced or natural demand functions.[/QUOTE]</p><p><br /></p>

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