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The fiat currency that we are all forced to use to pay for goods and services has inherent flaws that will eventually lead to the collapse of the entire global financial system.Fiat currency is supported by globalist bankers, the government and most central banks as a means of paying taxes and purchasing goods and services. It has no intrinsic value and is heavily susceptible to inflation. There are many other alternatives to fiat currency of which could serve the same purpose and not attract the same issues.One popular suggestion made by many economists is to return to the gold standard. The gold standard is regarded as an ideal monetary standard, both domestically and internationally, because of its unique qualities as a standard of value and a medium of exchange. The essence of the gold standard is the maintenance of a fixed price of national money in terms of gold, linking the price levels of all countries. This price-specie-flow mechanism ensures that any disturbance away from the national distribution of gold determined by a nations real income and money-making habits would lead to an equilibrating process through arbitrage in the gold market (Bordo and Schwartz. 1984).The history of using metals as a medium of trade dates back thousands of years. During the Middle Ages, the Byzantine gold Solidus, commonly known as the Bezant, circulated throughout Europe and the Mediterranean. But as the Byzantine Empires economic influence declined, the European world tended to see silver, rather than gold, as the currency of choice, leading to the development of a silver standard.Silver pennies, based on the Roman Denarius, became the staple coin of Britain around the time of King Offa, circa AD 796, and similar coins, including Italian denari, French deniers, and Spanish dineros circulated throughout Europe. Following the Spanish discovery of great silver deposits at Potosí and in Mexico during the 16th century, international trade came to depend on coins such as the Spanish dollar, Maria Theresa thaler, and, in the 1870s, the United States Trade dollar.In modern times the British West Indies was one of the first regions to adopt a gold standard. Following Queen Annes proclamation of 1704, the British West Indies gold standard was a de facto gold standard based on the Spanish gold doubloon coin. In the year 1717, master of the Royal Mint Sir Isaac Newton established a new mint ratio between silver and gold that had the effect of driving silver out of circulation and putting Britain on a gold standard (8).BENEFITS OF THE GOLD STANDARDThe current economic crisis in the United States of America, Europe and Asia has prompted a debate about whether using a fiat currency is the best option. There are numerous studies available about the benefits of returning to the gold standard.In a recent publication by Duarte and Andrade (2012) about how the gold standard functioned in Portugal, they found that thirty-seven years of convertibility, apart from a three-month moratorium in 1876, demonstrated that a peripheral country like Portugal, that the adoption of the Gold Standard in 1854 was the right decision, and a practical one, given the chaos of the countrys monetary situation.Duarte and Andrade (2012) also concluded that Prices between 1854 and 1891 were stationary, that is to say, they exhibited the characteristics that were expected from the Gold Standard from the outset.Also, White (1999) commented that using a commodity like gold provides a credible anchor for price levels. White (1999) also points out that the money supply cannot be arbitrarily increased and shocks to the quantity of money can only occur when there are shocks to the profitability of producing gold.Ultimately, gold doesnt attract the same inflationary pressures like fiat currency does. Central banks cant also print gold and devalue it in such a simple way. Admittedly, there are ways to devalue gold, but this is very difficult to achieve, unlike fiat money of which can be printed cheaply.PROBLEMS WITH THE GOLD STANDARDIntroducing the gold standard and replacing our fiat currency wont necessarily solve all of our problems. One major criticism of the gold standard suggested by Butterman et al. (2009) is that the total amount of gold that has ever been mined is estimated at around 142,000 metric tons and arguments have been made that this amount is too small to serve as a monetary base. The Federal Reserve Bank of St. Louis values this amount of gold worldwide is over 6 trillion dollars while the monetary base of the US, with a roughly 20% share of the world economy, stands at $2.7 trillion at the end of 2011.Paul Nathan (2011) believes that even if the government and people decided to return to gold, any specifics plans for implementing a return to gold will depend greatly on such factors as international monetary arrangements and conditions, domestic monetary arrangements and conditions and the legal, financial and structural conditions of the banking system.Another valid criticism of introducing the gold standard argued by DeLong (1996) is that the Monetary policy would essentially be determined by the rate of gold production.Fluctuations in the amount of gold that is mined could cause inflationif there is an increase or deflation if there is a decrease. DeLong (1996) and Warburton (1966) also beleive that the gold standard contributed to the severity and length of the Great Depression as the gold standard forced the central banks to keep monetary policy too tight, creating deflation.CONCLUSIONThe fiat currency that the globalists, bankers and government encourage us all to use as a medium to trade goods and services is not the long term option the global community needs. There are other alternatives that need to be thoroughly investigated. The general public needs to know what these options are so that rational decisions can be made about the currency we use.The benefits of the gold stand are equally as valid as some of its criticisms. At the end of the day, fiat currency does not have the capacity to naturally control inflation like gold does and fiat currency can be more easily manipulated by central banks and governments than gold. Sadly, while most people are ignorant about how their money is created, the globalists, government and bankers will continue to control the general populous covertly. Cited Sources