Our fear is that the limitations of our current system of fiat money will become increasingly obvious over the coming months and years. Yet we are optimistic that, as it does so, the search will intensify for better alternatives (including to gold, given its limitations as a currency).

For a hard-core group of gold bugs fiat money is in so much trouble it is a matter of urgency that the world should return to the system of gold-backed money that dominated the global economy at the end of the 19th century. Much of their argument — made by the likes of the Gold Standard Now campaign — rests on gold's track record over many

In December 2010,

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

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

A combination of President George W. Bush's tax cuts and Obama's post-financial-crash stimulus had, in a decade, taken federal debt from 33% of US national income to 62% in 2010. Unreformed, it was projected to keep rising, to 90% in 2020

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.

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

Silver money can claim a 5,000-year history. Gold money did not make its first appearance until two millennia later around 550 BC when, according to Herodotus, the Ancient Greek 'father of history', the King of Lydia (in modern day Turkey) started minting coins made of it.