4T? What 4T?

[Mikebert]

There is a reason why there is no longer a gold standard.  The supply of gold is limited.  It expands at a slow rate.  The world output of goods and services (GDP) grows at a much faster rate than the supply of gold (S).  If gold was used as money, its value would be directly related to the ratio of GDP to S.  This means gold sitting in a safe draws a return and anyone would has more gold than they need to pay for living expenses would hang on it to.  This would reduce S and increase the value of gold further.  Thus by not using gold for purposes other than paying for consumption (i.e. investing) owners of gold would maximize their returns.

The economy would be in a permanent depression, which would eventually force world growth to slow down to match the rate of gold increase.  It would not take long for someone to propose an alternative and you would be back to fiat currency in short order.

Benjamin Graham proposed an alternative to the gold standard.  A "commodity standard" composed of a fixed basket of industrially-important commodities.  The inflation indices are a version of this kind of idea, but use a much bigger basket which is not fixed.  Central banks have moved towards targeting an inflation rate rather that a fixed level.  The reason for preferring a positive rate was to provide an incentive for holders of surplus money to invest it.