Comments: Gold as Money: FAQ

I have a question that has always puzzled me:

How can we make the switch to a pure gold currency without causing the entire economy to collapse due to the extreme deflation. While I understand that a steady deflation is good, wouldn't waking up one day to the knowledge that your fiat savings are know worth only 1 once for every 1,000 in usable income (probably less if a switch was made mandatory through government). That would make my savings seem pretty worthless (in the eyes of the people that view quantity better than quality. We need to remember that we do live in the "Super Size" generation).

Also (to echo Izzy), is it not more important to switch to a voluntary money supply instead of a compulsory gold money supply. I like the idea behind the Liberty Dollar, shouldn't the Austrians and Libertarians of this site make a page on the benefits of a voluntary currency instead of a gold currency. The benefits of allowing the market to make the choice instead of a benevolent government official (even if his surname was Paul).

Hmm, all great points so far. Such a tough subject.. It's hard to add anything at this point.

As Milton friedman always said an ounce of gold is enough as a monetary backing. And as far as transport goes, lookup money on island of Yap. money is large stone that never get moved. you do not need to move that  ounce of gold.

Milton Friedman Quotes:

"I regard a return to a gold standard as neither desirable nor feasible — with the one exception that it might become feasible if the doomsday predictions of hyperinflation under our present system should prove correct."

"A real honest-to-God gold standard is not feasible because there is essentially no government in the world that is willing to surrender control over its domestic monetary policy."

It seems to me that nowadays, with the current economic situation, there is some "passion" for the gold standard as a solution to all problems the world is currently facing whether on international, national or even individual level.

Taking into consideration the above mentioned points, especially #4 and #5, let me suggest to discuss the possibility of not using the gold standard only, but let us imagine a hybrid  standard, including several precious metals together, e,g. platinum, gold, silver, (any others?)

According to this scenario 1 Gold Dollar = 100 Gold cents = 500 Silver cents = 5 silver dollar = 0.5 Platinum dollar... etc. (for example)

At the same time 1 Gold Euro = 1.3 gold dollar =.... =... etc.

The main obstacle to the above, how would/ why would a country or a government give up control over it's money supply and/or exchange rate?