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Originally posted by James1982
I've got a simple question that I've yet to be able to figure out:
Instead of having gold BACKED money, as in paper dollars that you can supposedly redeem for a given amount of gold, why not just go back to actually having gold IN the currency itself, like we used to?
Obviously with the extremely high price of gold currently, you couldn't have any large or solid gold coins, but why not get rid of paper money, go to coins only, and have coins with a very small percentage of gold in them? A dollar coin made mostly of nickle or zinc or whatever, with a slight percentage of gold (1 dollars worth of gold, guess that wouldn't be much gold at all huh?)
Is there any reason why the change happened? Why did we go from actually using gold to make the currency, to having paper simply backed by gold? (before the backing disappeared all together, that is)