Abandoning hard money

With the world on a gold standard and paper currencies such as the US dollar issued as claims to gold, the world temporarily benefited from having a hard money underpinning economic activity while leveraging paper notes and improved accounting practices to allow for commerce to flow with the speed and scope of telecommunications. Of course, history has shown over and over again that the only limiter to the creation of new money and its associated debasement is its inherit difficulty of creating more.

With paper notes being accepted as equal to the hard money that was gold, the issuers of the notes - governments and their central banks - began to create more of them. Over the past century, the United States dollar - and with that most of the world currencies backed by the dollar as of the Bretton Woods agreement of 1944 - slowly broke its peg to gold, culminating in a complete break when president Nixon permanently halted the convertibility of the dollar to gold in 1971.

With a world running on fiat money, meaning it is not backed by any commodity, we collectively switched to a soft money that central banks could create more of with the snap of a finger. The evolutionary competition of money is still happening but rather than partaken by natural commodities with their inherit hardness, it is a scene of fiat moneys with different monetary inflation policies duking it out, and now with new contention from bitcoin and potential Central Bank Digital Currencies.

Today, all around the world, central banks are printing new money to finance government expenditures at the cost of a debasement of their money and redistributions of wealth, whether seemingly tied to democratically achieved policies or completely detached from the best interest of their citizenry.