From time to time, I’ll read an article on a libertarian or paleocon site that bemoans the end of the gold standard, and dreams of a day when we can replace those worthless fiat banknotes we carry around in our pockets with some form of money that’s firmly backed by something of real value.
Fiat currency leads to inflation, which whittles away the savings of people who try to store up their value in money. It also is a sort of grandiose, slow-burning Ponzi scheme, which strikes some people as fundamentally dishonest.
But attempts to establish a new medium of exchange that is backed by something concrete have had a hard time getting off the ground. In part, this is because the government jealously guards its monopoly on issuing legal tender (with some exceptions).
But also, most people really don’t pine for the days when they could take a $50 silver certificate to the U.S. Treasury and demand fifty silver dollars. People seem content to use inflationary fiat currency as a medium of exchange, and to use other mechanisms to attempt to store economic value.
, the United States Postal Service began issuing a non-inflationary, value-backed currency in the form of its “Forever” stamps. A sheet of 18 stamps, about the same size as a dollar bill, will “forever” (that is, as long as the Postal Service honors its promise) get 18 first class envelopes from here to there, which seems to me a more constant measure of value than even a particular weight of gold. These sheets have a built-in exchange rate with U.S. currency (currently one sheet is pegged at $7.38).
I wonder that the gold bugs haven’t yet converted their greenbacks to stamp sheets.