Gold has been chosen as a medium of exchange for thousands of years.  A medium of exchange is necessary for a society to get beyond barter.  A medium of exchange that is used frequently is a money.  There are some unique qualities which make money.  Gold is in a limited supply.  It’s used in exchange because people consider it valuable.  Gold was accepted by the people.  It wasn’t forced on them.

As Murray Rothbard pointed out, money is the “nerve center of the economic system.”  Going off the gold standard destroys interhuman relations, cooperation, the market, and freedom.  There is no reason why one agency should have this much power.  In essence, the state creates permanent conflict.  They can’t print gold like they can with paper.  So, they just add more zeros to their bank account.  What a marvelous position.

The gold standard didn’t fail.  The use of gold as a money existed without any interference.  States around the world abolished the use of gold.  They started printing paper, and made people accept it by law.  Money will exist without any action by the state.  Gold will be used naturally.  Paper can’t work as a money.  It can be printed at will.  The state doesn’t earn revenue, so it covers its deficit by printing.

The state declares what shall be used as money.  They presume to have this power.  The individuals can’t contract gold as a money.  They must use paper, and can’t reject it.  There can’t be peaceful relations between individuals.  The more power the state has over money the less peaceful relations will be.  There is no reason why states should have this power.  Not much is more harmful than a monopoly issuer—probably nothing.

An enormous amount of problems stem from money printing.  Nearly everywhere in the world selected gold as money.  This was done by private individuals.  A central authority is not required.  This required no mandates or legislation.  Agreeing with paper money is agreeing with counterfeiting, manipulation, the business cycle, inflation, war, and more.  Individuals using gold as money can end all of those.

References

Ludwig von Mises; On Money & Inflation

Murray Rothbard; The Case for 100 Percent Gold Dollar