Having been enlightened to the mechanics of the fiat money system by many posters, I now have two questions.

How was the dropping of the gold standard justified by the governments of the time ?

What justifications do the governments give for not re-introducing it now ?

The problem last time the US printed too much money and gold was fixed at $35, so you can work it out.

The sheeple were too ignorant to care about the gold standard once they had been weened on paper token. They never stop to question if money has anything other than psychological value.

I asked a similar question on a gold forum. One answer I remember particuarly is that over history nations have gone on conquests for gold because it was the ony way to meet their monetary needs. If money is a physical entity then there is a limited amount. If you need more for what ever reason then you must find some more - or steal someone elses.

The market can also be cornered, meaning one party gets all the money. If you combine interest with fractional reserve banking then it looks to me that eventually the banks will get all the money. I seems to me that both fiat and physical money systems have an ugly sides. Because fiat requires no physical entity it avoids those problems but it is easily misused.

This is just my own thoughts though. I am interested in knowing whether they hold merit.

I think it was Nixon that finally lead the demise of the gold standard, although it was not a real gold standard even then. He needed money to fund the Vietnam war and began printing dollars to pay for it. Other nations who held dollars did not believe he had enough gold to back them and feared their dollars were depreciating. They started to ask for their gold in exchange for the dollars and he ended up saying 'no you cannot have anymore - we're fiat now'. Notice how this ties in with first problem mentioned about gold. He needed more money but did not have enough gold. But instead of trying to get more he just changed the money system. Inflation followed. I don't know how he justified it. Probably did not, just ignored people who did not like it. I think you are supposed to be able to exchange your dollars for oil because oil is always sold for dollars. I think this is the meaning of the term 'petrodollar'.