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> Nixon made his decision for the simple reason that the US was running out of the necessary gold to back all the dollars it had printed.

That's the whole problem right there. The ~~counterfeiting~~ quantitive easing is simply too attractive to the congresscritters to allow a little honesty to get in the way.




Economics is not a morality play, and connecting money to gold has nothing whatsoever to do with honesty.

Look, the most important point of money is to facilitate economic exchange. Yes, rentiers want to store their savings somehow, but there's a reason that the word rentier has negative connotations.

Facilitating economic exchange requires that the amount of money correlates with the size of the economy. Fiat currency can do that (thanks to bank loans, which can shrink and expand based on endogenous demand from the economy), and gold-based currency cannot do that. It's really as simple as that.


With respect, may I ask what the reason actually is, that the word rentier has negative connotations?


Being a rentier means having income without working. Traditionally, this was because you inherited wealth, e.g. in the form of land.

Most people's sense of distributive justice has some aspects of desert theory, i.e. people tend to believe the economic distribution should align with what people deserve, where the latter is typically defined via what their contribution to the economy is.

From that perspective, rentiers have undeserved income, hence the negative connotations.


I appreciate your helpful reply. Thank you.




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