If the goal is only stability printing moderate amounts of money during periods of economic expansion is by far the best way to get there. It is overprinting and deficit spending that get us in trouble, they are common, but not necessary part of fiat currency system.

Problem with gold standard ideas and the like is that expanding money supply during growth times is difficult. If you have increase of productivity and economic growth you will end up getting constrained by your monetary system and will produce a measure of deflation that will limit growth. Advantage of a fiat system is that it can expand monetary system on demand to address this problem.

It can also print money and create bubbles, but that is not unavoidable. It can also speed up recovery from complete systematic collapse - you can't inflate away your debt, so starting with a clean slate becomes harder.

Did any nation in modern history went bankrupt while still holding to a gold standard?


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