I suppose that means you actually believe that Gold should really be selling at $800/oz when it was selling for $35/oz when we were still on the Gold Standard. That it is okay for the Federal Reserve to be able to snap its fingers and magically create a billion dollars out of thin air.
Our currency isn't tied to anything tangible. It's only supported by the collective belief that it has to be worth something, and that's forced upon us by a government that mandates we use it.
Though perhaps I failed to be sufficiently clear on what I was saying, about the fact that we left the gold standard which prevented the Federal Reserve from inflating our money supply making it worth less, because to remain on the gold standard we had to be able to cash every dollar that we issued in the amount of gold we said it was worth. So in order to issue additional money we would have had to maintain a positive trade balance, and thus have more gold that we could buy from private enterprise with dollars issued to purchase it.
And the argument that we needed more money to support a growing economy is something that I disagree with. Absolute money supply isn't what determines the strength of an economy. It's the movement of money that must be measured to determine the health of an economy. Of course, when all of our money started moving overseas with the change from the US being a creditor nation to a debtor nation we had no choice but to issue more money to maintain the economy, and thus reached a point where it became impossible to redeem all the dollars in circulation for gold.
At that point we had to leave the gold standard.
