I wanted to clear up the apparent confusion about the gold standard aka paying with gold.
The US Treasury prints money, which it guarantees has worth by backing it with the government’s full faith to honor it. That’s why it says “This note is legal tender for all debts, public and private.” For example, using Seth’s baseball cards, if the government printed and issued them with an assigned value, then yes, you could buy things with them. The only material in the world, that all agree with its value, is gold. Gold is worth the same in North Korea, China, US, Germany, South Africa, etc. That’s what makes gold attractive to people; no matter what their government does to its currency, gold still has the same worth. The only thing that changes is how much US currency you’ll need to purchase gold. The higher the price of gold, the less the dollar is worth. Currently gold trades for $1106 an ounce; in 2000 it traded for about $275 an ounce. This is because people are losing faith in the US government’s ability to back up its currency, and is the reason for legislator’s action.
During the Great Depression, people panicked that their money was going to be worthless, like it was in Weimar Germany - a whole wheel barrow full of Deutsch Marks would buy a loaf of bread. So, they tried to trade in US currency for gold while the currency still traded for a high amount. Unfortunately, the government didn’t have enough gold for all the paper money it issued - exactly like today. If people ever lost faith in the US government’s currency (through failure to reign in debt, for example) then the paper it issued you is absolutely worthless. No one would accept the currency because it isn’t backed by gold; it’s only backed by the promise that it has worth.
It’s nearly impossible to return to the gold standard, though. Imagine trying to make a gold coin with a relative value of $5. Doing some math, you’d need to make a coin that has .0045% of an ounce of gold in it. You’d have to add in a nearly worthless metal (like zinc) that would make the coin 99.9955% zinc and the gold would be nearly impossible to extract from the coin when it is destroyed.
Hope that helps.
