[Gibbon1]

You want a link? Here is one,

http://www.bradford-delong.com/2015/03/time-for-a-rant-why-o...

The short answer is a run on safe assets like gold creates a positive feedback loop. A demand short fall causes people to try to acquire safe assets like gold. Spending 'money' on gold means money not spent on real goods and services. Which results in a demand shortfall. And people wanting safe assets to park their wealth.

Rinse lather repeat till 1/4 of workforce is unemployed. A central bank can print or lend out any amount of paper money to satisfy investors craving for safe assets. It can't make more gold.

Why not have both? Problem: Trying to peg the money supply to the price of gold hamstrings the central banks ability to supply paper. Lesson learned 1929-1939. And learned again by Argentina in 2000 with a US dollar peg serving as a de facto gold standard.

[PepeGomez]

How do you spend gold on gold? You can't spend money on gold when money = gold.

[Gibbon1]

The problem is as soon as you throw debt and rents into the mix it all blows up, because debt and rents are 'paper'

If I loan creshal $5000 at %5 interest, I have basically a note on $500 worth of income a year. I can turn around an use that note to buy something. Now someone else owns the debt worth $500/yr. Until the crisis hits, creshal loses his job and flees to Argentina and now that note isn't worth diddly.

Short: Modern economies are rife with way to turn physical assets and rent streams into something akin to cash. So even if you think you're on a gold standard, you aren't really. Your on a gold + this bond entitles the holder to £500 per annum from the Village of Shlopshire. (Because in 1804 the village borrowed money to replace a bridge)

[creshal]

Even with a gold standard, you're usually not using gold coins directly (if only because it's hard to make coins for smaller denominations with it), but rather bank notes that are guaranteed to be redeemable for gold (as long as you don't try it out).

cf. https://en.wikipedia.org/wiki/Gresham's_law

[PepeGomez]

Indeed, but they are still representations of gold and are for all legal purposes equivalent to gold. When you convert them to gold, you don't spend money on gold, since they are one and the same and you can convert the gold back at any time. It's technically not different from changing banknotes to coins or wwithdrawing cash from your bank account.

I don't see why you think that the link is relevant. It would apply if there were gold and silver standards simultaneously, for example, but that's not what is being discussed.