In Gold We Trust? The Future of Money in an Age of Uncertainty (Kindle Single)

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.

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.

Carrying bulky bags of barley when on a shopping trip is not very practical. Moreover, barley is perishable, so not a good store of value over long periods of time. That is why, around 5,000 years ago in present-day Iraq, some forgotten financial innovator came up with the brilliant idea of expressing a fixed weight of barley, 11 grams, in terms of

I think it's as clear as the nose on my face that the fiscal path we're on is simply not sustainable. And when I'm asked to describe the situation we face, to me, it's always like a cancer, and it's a cancer that truly is going to destroy this country from within." This was not some crazed right-wing extremist speaking, nor even Alan Simpson,

It was a fear of the economic and social upheaval that might be caused by money losing its value that drove Britain to adopt "sound money" policies nearly 300 years ago. This move coincided with an unplanned switch to using gold instead of silver as the basis of money and, ultimately, to the accidental birth of the gold standard. Its &quo

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.

Social websites such as Second Life and even Facebook have experimented with creating their own currencies. But the most interesting innovation so far has been the launch in 2009 of bitcoin, a digital currency with an encrypted soundness algorithm designed to allow the supply of bitcoin to grow in a way that is mathematically inflation-proof.

Inflation has been an economic taboo since the 1970s but maybe not for much longer. Government and citizens alike are now much more indebted than they were at the start of the Great Depression. In such circumstances, inflation could come to seem positively desirable, especially for borrowers, as it would erode the value of their debts in real terms

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.