>> something that is not fixed in nature is, IMHO, a far better system
>Why?
Simple - wealth has never been a "finite resource" ... `"Wealth grows wherever men exert energy," Arkad replied. "If a rich man builds him a new palace, is the gold he pays out gone? No, the brickmaker has part of it and the laborer has part of it, and the artist has part of it. And everyone who labors upon the house has part of it Yet when the palace is completed, is it not worth all it cost? And is the ground upon which it stands not worth more because it is there? And is the ground that adjoins it not worth more because it is there? Wealth grows in magic ways. No man can prophesy the limit of it.` (The Richest Man in Babylon, by George S Clason)
But gold, silver, etc are finite resources
Basing your currency on the overall value of your economy as a whole makes far more sense, IMO - finite physical resources are [relatively] easy to hide/disguise (or subject to 'sudden' upheaval (eg the Comstock Lode[0], Alberta Oil Sands[1], etc))
And when new finds of such resources occur, there is always volatility in the pricing of those resources (let's say Fiji suddenly discovered massive gold deposits equivalent to the annual production of the top 3 countries combined - what would happen to the price of gold?)
The gold standard only makes sense in a world full of dictators, ceasars, and absolute monarchs - wherein their individual statuses and legitimacy of their reigns are pretty much tied to their gold storehouses
Have more gold? You must be "better" than the king next door who has half as much. (But not as "good" as the queen on the other side who has a third more than you do.)
Whereas basing national currency on your entire population's economic [current, likely, and potential] output gives an actual standard upon which to compare - ie compounded individual effort made to keep the country alive and going
I recognize this is not a popular stance amongst some HN'ers (especially those in the Big (or Small) "L" Libertarian camp)
But basing currency on naturally-occurring resources (gold, oil, uranium, silver, aluminum, whathaveyounot) is a selfish, myopic way of viewing the world.
Is a nation whose natural resources do not include one of those "key" items inherently any less worthy of consideration than another whose resources only (or dominantly) rely on them?
Is, say, Angola a less-worthy nation (economically-speaking) than, say, Khazakstan - just because the latter has more oil or gold or whatever? Or is it a more-worthy nation because it has resources the other does not?
Resources are all well and good - but it is entirely what the nation as a whole (ie individuals working in their respective jobs, rolling-up into total economic output) does that indicates whether it is economically more or less valuable than another.
It is part of the problem with the Euro as a currency standard - an attempted amalgamation of 20 national economies under a single backing[2]: yet look at the difficulties it has had in dealing with member states with lousy economies (Italy, Greece, etc).
When each of those countries was using its own currency, you could [relatively] quickly determine the strengths and weaknesses of each country's economy. Now? Much harder - and Germany and France are dragged down by Slovakia and Portugal (and, somewhat conversely, Slovenia and Greece are pulled [slightly] up by Ireland and Belgium).
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[0] https://en.wikipedia.org/wiki/Comstock_Lode
[1] https://en.wikipedia.org/wiki/Athabasca_oil_sands
[2] https://european-union.europa.eu/institutions-law-budget/eur...