How the Concept of Money has Lost its Way
What is money? Historically money was created to represent a permanence of value. Whereas the value of labor or a commodity could be fleeting, money and therefore value could be retained for the future. It also provided a common currency for trade.
Originally most money was minted into coins of precious or semi-precious metals such as gold & silver, so value was directly related to the scarcity of these materials and the labor involved. This provided a reasonably stable platform. Fluctuations would be mild and slow. Trade using money between individuals was not necessarily susceptible to borders as an ounce of gold's value was universally known. Coins carried their value within their own content. In fact you didn't need official coins to transact business. Coins minted by government bodies were simply easier as they contained standard sizes, denominations, and purity, making them easily recognizable.
In fact into the twentieth century, 1933, the US issued $20 gold coins worth... $20. This was the same year FDR and Congress took the US off the gold standard and also barred US residents from owning all gold coins, certificates, or bullion. In fact the government essentially confiscated all of these items.
What did we get in return? Paper and a promise. The paper remained tenuously linked to the price of gold, but at the whim of government. The following year, 1934, the $20 piece of paper in your hand became worth almost half that amount as the government determined that the $20 piece of paper you received for your ounce of gold could only buy just under 60% of an ounce by raising the price of gold to $35 per ounce. Overnight inflation and devaluation.
In 1971 US dollars left their link to gold completely allowing the Federal Reserve to print money at will. They even get to collect interest on the money they print. Inflation becomes inevitable just as if you were given a credit card with no payments ever due.
With no underlying link to an anchor money becomes much less meaningful as seen by the debt incurred by the government. There is no downside for them to continue the use of "free" money. The downside is for all those who can't print their own money; you and me. The value of everything we work and save for daily returns less and less for our sweat and efforts.
I am not an advocate for linking US dollars back to gold as many are want to do. With all the new demand for gold in high technology & other industries I don't see it a stable commodity any longer. With governments around the world able to print money at will I see little benefit from staying with the current system which is inherently unstable and prone to manipulation.
Recently there has been a lot of talk about Bitcoin, but I'm afraid I don't buy into that idea completely either. Although it has some merits over the government paper system.
Ultimately the answer might be to tie currency to another more stable commodity item which cannot be consumed or destroyed. I'll leave the answer to what that would be open since any suggestion I make would have its detractors.
The one thing I can tell you it the current systems are plagued with misuse, manipulation, and corruption by those who hold the strings. Money in its current incarnation has lost its way and has no dependable tangible value. What ever worth it has is no longer controlled by value.