Today, gold bugs talk about gold having been money for millennia, which is actually rather misleading. For most of human history, the metal that was typically used as money was silver. By contrast, gold was too rare to be widely used in a liquid market (a necessary condition for a commodity to be money). Silver was more abundant and deposits of it

The year before John Paulson decided, in the spring of 2009, to give investors in his hedge funds the option of having their returns measured and paid in gold, he had made a fortune for himself and his clients by betting on the value of America's housing markets and banks. Now he was betting that an even more basic product than housing — money

The first big breakthrough in solving this problem was turning pieces of metal into coins, and certifying their weight and purity by stamping them with a mark — typically in the form of some ruler's head. Thus government got drawn into the business of guaranteeing the soundness of money.

when there is a mixture of 'good' coins with high silver content and 'bad' coins that have been clipped or debased circulating, the public will hoard the valuable good ones and pass on the bad ones to others.

Maybe innovators in the private sector will produce some entirely new form of money that is not dependent on government at all.

spending by America's Federal Government (adding in state and local governments significantly increased the total) was around 24% of national income whilst tax revenues were 15% of national income. That left a near-record peacetime budget deficit to be financed by borrowing of 9% of GDP.

bad money drives out good, if they have the same value.

With early investments in social media companies such as Twitter, Tumblr, Foursquare and Zynga, Fred Wilson has become one of the world's most watched angel investors. And one of the opportunities he is watching most attentively is the emerging industry of digital money.

According to the World Gold Council, the "golden constant" is reflected in the fact that an ounce of gold was worth a "mid-range outfit of clothing" in the 14th Century, in the late 18th Century, and in the first few years of the 21st Century. The price of that outfit in fiat currency, by contrast, has increased many times over.