[chesh]

The main reason is that paper money is the biggest ponzi scheme the world has every seen. Every government in the world is coming round to printing more and more of the stuff. We just don't realize how bad the situation is because we are used to comparing the value of our paper dollar with a paper Euro or Yen, and they have all been devalued.

Gold cannot be printed ad infinitum. Each year roughly 2500 tons of the stuff is mined, which adds around 1.5% to the global above ground stock of gold. This 1.5% growth rate is declining, while the amount of new paper money that is created each year is increasing.

Bottom line is it the only real measure of value left in the world.

[craigyk]

What you can trade for using your currency is what gives it value. At least IMO. In that case paper money is doing fine. The primary purpose of currency is too ease trade, not too keep score. As long as the value of paper money stays relatively stable over the short- to mid- term than it is doing it's job. 0-5% inflation a year is pretty stable, it's not going to have a large effect on when I chose to purchase things. In fact some inflation might be good to counteract the effect of technological advance: sure my money might be worth 5% 'less' a year from now, but I'll be able to buy something 50% 'better'.

[danilocampos]

...Until a gold-rich asteroid gets towed into mining range.

[ewang1]

Haha, until we run out of the materials needed to print paper money...