It is no secret I am a strong supporter of the gold standard, and, not just the gold standard, but a private gold standard where the government plays no role beyond defining what quantity and quality of gold will constitute the currency it will accept in payment for taxes. Beyond that, banking and even agreement as to what will constitute money, should be a private matter, decided between the parties involved in the transaction. Of course, the unit of currency favored by the state will most likely become the de facto standard of the community, but there is no reason, should the unit of currency prove unwieldy for one reason or another, that one or more private currencies could not come into being among various groups, which would be converted into the "national" currency only for payment of taxes and other government debts.*

But I am not here to discuss my support of the gold standard, but rather to answer a question I am frequently asked. And that question is, though the wording often changes, "given how long we have been on a paper money standard, is there any chance the government would ever go back to gold?" Or, in the wording I hear most often "Is there any chance this will happen?" Having heard such defeatist comments for so long, I wrote an essay entitles "Why Gold?" to explain my commitment to a specie based system.

However, today, while watching a news story about the financial chaos in Greece, I realized that the right answer had eluded me up until today. And the answer is this: The question is not whether we will go back to a gold standard, but when we will do so, and how. I have thought about it a lot, and the fiat system is just too unstable. Prone to massive inflation even when tied fairly tightly to gold in the 30's, today it is a ticking time bomb, as seen by the escalating rate of panics, recessions and other financial crises. With currency crises coming at an accelerating rate, there is simply no way fiat currency will survive forever. Sooner or later the financial crises will drive individuals to flee into concrete values, to resort to barter, and, in the end, to reinvent a private standard, likely based on gold, or some similar precious commodity. So the question is only, whether we will return to gold in an orderly and controlled way, or whether we will rediscover gold as we crawl out from under a financial collapse.

If anyone doubts this, we need only consider the "land banks" of 17th century colonial America. In the states where they existed they were quite popular and lasted for quite some time. As they allowed those colonies to effectively inflate and export that inflation to colonies with a more sound financial system, they were popular with politicians too. However, after countless panics, collapses and other quite familiar stories of financial woes, those colonies eventually rediscovered the gold standard. The same was true of almost every past attempt to create money out of nothing, to found an empire on a pile of paper. Every time, the supposed benefits made it impossible to consider returning to the gold standard, at least until the final collapse made anything but the gold standard unthinkable.

Unfortunately, I fear, given our dedication to the promise of something for nothing, our belief in the technocratic goal of a ":managed currency" and eternal prosperity, that we will not return to the gold standard voluntarily. I hope it is not our fate to have to rediscover gold through being left no alternative, but from the reaction I hear to my arguments for gold, I fear there is no other possibility. But things can change, time brings new ideas and new leaders to the fore, so perhaps it is not inevitable. We shall see.

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* Before anyone thinks this sounds absurd, I would ask any child of the 80's to recall the many local video arcades which had their own tokens. Each used a different token, and yet the players had no problem converting between US tender and the various tokens and back again. If teens can figure out a system of multiple competing currencies, surely intelligent adults can handle it as well. (One could also view gift certificates, coupons,  and other such surrogate currencies as systems of competing money, usable only in certain venues. The advantage of competing currencies under a gold standard would be, as all are base don the same precious metal, someone knowing the weight and fineness of a given coin could immediately compute a fair conversion rate.)

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POSTSCRIPT

My writing on the gold standard and fiat currency can be found in the following posts:

And you got rich?
A Quick Thought On The Housing "Crisis"
Two Perspectives
How to Blame the Free Market
The Limits of Technocracy
Predictability
Why Government Fails,
The Shortcomings of Pragmatism
 Protectionism
War Stimulates the Economy? Let's Nuke San Francisco!
The Bureaucratic Mind
The Theory That Wouldn't Die
Beware Populist Deception
Saving Us From Lower Prices
Inventing a Crisis
Inventing a Crisis II
Inventing a Crisis III
And Here It Comes Again
To Correct Debra Saunders
Another Thought on the Housing "Crisis"
Hooray For Phil Gramm!
Confirmation
When Help Hurts
Fear of the "Big"
I Hate Election Years
If We Took Them Seriously...
The Little Guy Can't Compete
The Crisis Ratchet
Price Gouging
Hooray For Debra Saunders!
Maybe It Isn't a Crisis After All
Quick Economic Update
An Unfortunate Consequence
Bringing Some Good Out of Our Financial Problems
Direct Your Anger Properly
Some Brief Thoughts on the Bailout
Living Beyond Their Means
A Question
Face The Music, Don't Try to Buy Votes
A Final Comment on the Futility of a Bailout
A Question For Republican Politicians
$700 Billion?
Asking Yet Again
Clarification of My Opposition to the Bailout
Greed
A Little More On CEO Salaries
Greed Part 2
A Bit Disappointed
Laughable Talk About the Bailout
A Short Question
The Excuse Making Begins
More Bad Excuses
More Bad Excuses II
Well, It Was Bound to Happen...
Repeating the Errors of FDR
One More Senseless Defense
Doing Nothing
A Question
Economic Question
It Is Ending Already 
How Does That Work?
It Is Nice To Get Confirmation
Are You Serious?
I Think I Finally Got It, and... Eh
Small Business Fetish
Things You Won't Hear on the News Until Wednesday
And the Excuses Begin
Our Financial Problems
Critique of Krauthammer
I Must Keep Asking
Monetary Issues Made Simple Part I
Et Tu, Town Hall?
Thanks For Saving My Stocks
More Confirmation
Perception and Reality
Crisis?
And Still More Confirmation
Monetary Issues Made Simple Part II
Silly Panic
Apparently I Was Not Alone
Hair of the Dog?
More Bailout Silliness
Playing Cassandra
John Stossel Imitates Me
Brief Comment
Remember I Predicted It
Microloans and the Community Investment Act
"True" Prices"
Smaller Government , Fair Weather Friends and Special Cases
Walter Williams Imitates Me
Impatience
Experts and Unintended Consequences
An Analogy
Economic Illiteracy
Excuse Me?
The Reagan Lesson
A Passing Thought
Congressional Madness
One More Disturbing Quote
CNN's Keynesian Nonsense
Nationalization Rumors
A Question of Numbers
A New Solution?
Why?
I Should Not Watch Financial News
Can We Stop Now?
Beware When Politicians Agree
Government as Indulgent Parent
The Real Reason for the Bailout
Fairness and the Free Market
Envy Kills
An Unnamed Source in Doug MacKinnon's Piece Imitates Me and I am NOT Flattered
Revisiting Old Thoughts on Our Economic Situation
Well, Some Get It
I Wonder
An Analogy From Past Inflation
Perception and Inflation
How To Continue the Economic Problems
Another Bad Idea
Pointless or Destructive
John Stossel Imitates Me Again
Thomas Sowell Imitates Me
Making Lemonade
Continuing to Repeat Errors
Why"Negative" Economic Indicators Are A Good Thing
Recipe For Disaster
Not Entirely to Blame
How To Resolve Our Current Problems
D i c k Morris Gets His Economics Wrong
Envy And Analogy
Everyone Deserves Inadequate Housing
A Few Questions for Proponents of ANY Stimulus Bill
Sorry Peggy, Wrong on This One
Explaining Past Crashes
Misunderstanding Economics
Killing the Railroads
We're From the Government and We're Here To Help You
A Brief Question About Deficits
Environmentalism For The Economy?
National Debt
More Confirmation
More Frightening Financial News
Didn't I Say This?
The Limits of "Scientific" Management
The Inflation Engine
The Forgotten Fact
Perverse Incentives
Private Versus Public Sector
Quote of the Day
Changing the Measurements
An Economic Query
Interesting Reading
Fasten Your Seatbelts
Crippling Business
Technocrats
Nation of Debtors
The Dow
A Reason to be Afraid
Michael Barone Gets His Economics Wrong
The Problem With Economic Debate
A Question of Perception
Defying Nature
Thomas Sowell Imitates Me
A Sober Look at the Economy
Borrowing Versus Taxing
My How Things Change
Alan Greenspan's Hubris
AIG Absurdities
Planning For Imperfection
Weimar Republic Here We Come!
Elevating Mob Rule
How Does This Work?
AIG Nonsense
Inflation and Uncertainty
Very Good Article
Geithner's Problem
Derivatives and Other Investments
Do I Need to Comment?
Something to Keep You Awake
How AIG and GM Ruined Any Chance at a Less Intrusive Bailout
The Problem With The Auto "Bailout"
When You're Right, You're Right
A Thought on the Clinton Surpluses
At Last!
WSJ Misses the Mark AGAIN
Transparency, Corruption and Reform
Something We Forget
Place Blame Fairly, Regardless of Party
"Good People"
Subsidizing Irresponsibility and Poor Planning
He Said It At Last!
Too Big To Fail
Why Gold?
Proof Keynes (and Krugman) Are Insane
Shopaholic Government
All the News That's Fit To Invent
Treasury May Be Doing the Right Thing
Signs the Fed Is Not Getting It Right
Living Large During the Good Times
The Rubber Yardstick
When Did We Become Liberals?
D i c k Morris Gets His Economics Wrong Again
Bureaucratic Management
Misunderstanding Profits
Utopian Pipe Dream
Government Efficiency
Negative and Positive Rights
The Political Spectrum
Two Examples of "Inefficiency" in Capitalism
Greed Versus Evil
Cutting "Costs"
Life Is Not Fair - And Trying To Make It So Makes Things Worse
Liberalism's False Dichotomy
Anti-Business Businesses
When Help Hurts II
Utopianism and Disaster
Child Labor and the Industrial Revolution
Who Will Decide
The Inevitability of Bureaucratic Management in Government Enterprises
Symmetry and Asymmetry in Government
The Inherent Disappointment of Authoritarianism
Again?
The Best Historical Example
An Example of Inertia
Bad Economics Part 6
Bad Economics Part 7
Bad Economics Part 8
Consolidation and Diffusion
Pro Hoc, Ergo Propter Hoc
The Right Way
Bad Economics Part 10
Bureaucracy and Arbitrary Power
A True Conservative Platform
How Government Creates Crime
Bad Economics Part 12
Bureaucracy Revisited
In Praise of Contracts
Of Wheat and Doctors
Production and Consumption
Capitalism and Its Consequences
Put Your Money Where Your Mouth Is, Or The Logical Implications of Price Gouging Laws
Bad Economics Part 16
He's Bad So He Must Be Wrong
Bad Economics Part 17
The Irrationality of Government Redistribution
How the Government Corrupts Relationships
Moral For Me, But Not For Thee
Defending Freedom?
Antibiotics, Automobiles and the Free Market
Clarifying a Reality of Capitalism
The Most Misleading Word
What Is Money?
It's Not The Greeks
It's Not the Greeks Part II
Gold as an Indicator
What Is A Dollar?
Luxury and Necessity
Sour Grapes as a Political Philosophy
The Plural of Anecdote is Not Data
Government Quackery
Rethinking the Scopes Trial
Bureaucratic Management and Self-Policing
The Threat of Perfection
The Inevitable Corruption of Protectionism
How Much Does Government Cost?
Individual and Aggregate
The Difference Between Public and Private, Or, The Real Monopolies and Cartels
Volunteer Fireman, Barn Raisings and Government
Redundancy as a Protective Measure
Adaptability and Government
The Nonsensical Nature of Some Statistical Analysis
Mistaken Perceptions of the Industrial Age
Inflexibility and Bureaucracy
A Thought on Technology and Technocrats
Some Additional Thoughts on Technocrats
History Repeats Itself (And We Learn Nothing From It)
Politicians and Economic Ignorance
In The Most Favorable Light
Every Kid Likes Hot Dogs
With Good Intentions
Grow or Die, The Inevitable Expansion of Everything
Fear Driven Enterprises
"...Then Who Would Do it?"
Aggregates and Confusion
Collective Action and Government
The Fifth Wheel
The Importance of Details
An Examination of the Economics and Sociology of Government Spending
The Basics
Misunderstanding the Signs

There may be a handful of omissions, but I believe the list gives a good idea of my writing on the subject. I have also included some which discuss a number of topics, among which currency is but one topic, but I figured it was better to include such essays rather than omit an important argument simply because it also touched upon other areas of economics.

For example, many posts on bureaucracy were included, not because they speak about currency directly, but because currency management will, of necessity, but supervised by such a system, and so an understanding of the forces motivating bureaucracy will be essential to understanding some of the forces acting upon a managed currency, as opposed to a free monetary system. I also included several posts on populism, the fear of "big money" and other ways in which bankers are portrayed as villains, as such concepts are very important in the perpetuation of the government's control over currency.

And I also included some essays on pseudo-independent industries which either are government managed or subsidized, and the impact of such involvement, as some seem to think the problem with the Fed is that it is (nominally) private, and we would be better off were it fully public. It is an absurd position, but since it arises from time to time, I included these essays as well.

Finally, though not strictly part of the debate, I included some essays arguing that government is corrupt to the degree it is granted power. As any power beyond the protection of the basic rights of citizen must be exercised arbitrarily, there is no way to really avoid corruption, as any decision must be either arbitrary or self-serving. And so, in the case of the federal reserve, it is inevitable that some degree of abuse and mismanagement will occur. Though fiat currency would fail even if run with absolutely scrupulous honesty, this corruption simply makes things worse.