[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'.