Felix, using a commodity like gold is bad, because you end up with serious deflation over time.
Deflation is a lot worse than inflation. If you don't have enough money counters to go around, the value of a given counter keeps rising with scarcity.
Think about it. What if a "bleep"- the lowest value of currency available, was worth about the economic value of a piece of chewing gum. Then, 5 years later, it's worth the value of a bicycle. So, how do you buy chewing gum? In bushels?
And this in turn creates absurd policy problems- governments can either ignore it, reducing everybody to barter, for situations where the economic worth of the activity is lower than the lowest value of currency, or they can issue new currency at a fractional value of their current lowest-denominator money (which is what was done, over and over again, through the period leading up to the collapse of the
Bretton Woods arrangement, IIRC).
If the government doesn't act quickly enough, then trade becomes impossible. Moreover, borrowing becomes essentially impossible, in a situation of deflation- what you owe on paper is now worth more and more and more in real terms.
When you look at a bank loan under the current system, and factor in taxes, overhead, and inflation... on a prime-rate, long-term loan, banks make a lot less, in real money, than it would appear. People always look at the total number, instead of looking at the projected worth of all of that money over time. Banks are making a lot more real money on the loan during the initial period, as well- if the interest rate is fixed, then they're probably not making much at all, at the end of the loan, if it occurs over a long enough period of time, like a mortgage.
Moreover... if we used gold, everybody would be at the mercy of the nation that hoarded it most successfully, because any run on the currency would eventually require that real gold be released (
i.e., what happened IRL with Bretton Woods). If any nation held the vast majority of said commodity, and refused to release it to keep another country's currency from collapsing... it'd cause disasters.
In fact, we've already been there, with both gold and sterling, which is why we don't do that any more, and use a standard worth that's at least theoretically tied to GDP, or real economic activity. The "theoretically" part is worth arguing about, of course, and economists constantly do argue about it IRL, and currency traders make buy / sell decisions based on what they think... hence the shifting values of currencies against each other over time- basically, these are judgments about the real wealth of the nations involved.
Personally, I think that using something like gold is bad policy. If we had superconducting supercapacitors, energy might work, although it still has serious problems- there are plenty of economic activities that have high value, but require little energy, and many that require lots of energy, but have low value. And you'd still have all of the real issues of scarcity and hoarding.
I personally think that the current system, with all of its guesswork, is probably a better real representation of Reality than any commodity-market system. The guys who make the scaremonger videos are basically idiots who don't understand that, in the end, money's just a counter we move around by agreement, whose real worth is always a lot less than the face valuation. For example, the gold standard had nothing to do with the real economic worth of gold, as a chemical, and everything to do with gold's perceived worth in people's minds. Gold's actual worth, as a chemical, is considerably less than the perceived value, as an object of trade, even today, when converting gold into any other economic activity is basically just barter, in terms of complexity and time
