Your daughter's teacher wasn't completely wrong, merely using out of date information. Once, nations were on the gold standard. It worked moderately well. However, gold isn't valuable in and of itself; so the value of gold fluctuates wildly, so the value of gold fluctuated. Now, we could have gone over to, say, the silver standard, or the wheat standard, or the oil standard. By going to the trade standard, the value of money is backed by *everything*, every resource that can be taxed. This protects the value of money from fluctations in the value of any one resource. This worked well until the financial sector grew so large.
Your daughter might be interested to know that during the Great Depression large numbers of unemployed Australians followed her advice, and panned the accessible rivers for gold. We had the second highest unemployment in the world - second only to Germany - and yet remained a stable democracy.
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
fpb
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
no subject
Date: 2009-03-17 01:13 am (UTC)Once, nations were on the gold standard. It worked moderately well. However, gold isn't valuable in and of itself; so the value of gold fluctuates wildly, so the value of gold fluctuated. Now, we could have gone over to, say, the silver standard, or the wheat standard, or the oil standard. By going to the trade standard, the value of money is backed by *everything*, every resource that can be taxed. This protects the value of money from fluctations in the value of any one resource. This worked well until the financial sector grew so large.
Your daughter might be interested to know that during the Great Depression large numbers of unemployed Australians followed her advice, and panned the accessible rivers for gold. We had the second highest unemployment in the world - second only to Germany - and yet remained a stable democracy.