Gold vs Paper

A couple of good post on "the gold standard" vs "paper money".

MacroMania: Ron Paul's Money Illusion (Sequel)

MacroMania: Out of thin air?

I never really understood why people think gold is somehow a better currency than paper (or anything else). In the end, you can't eat gold, silver, paper, or any other currency. If you can't eat it, it's only worth whatever the current ruler says it's worth.

I guess it's just in our collective memory. It was a great currency in ancient times because it was shiny, easy to work/handle, and somewhat rare. We all grew up with the old stories about it and think it should be valuable today.

tnb