> Bank notes that cannot be exchanged for gold at fixed rate are recent invention Keep in mind that the ostensibly "fixed" rates were adjusted time and again -

> Bank notes that cannot be exchanged for gold at fixed rate are recent invention Keep in mind that the ostensibly "fixed" rates were adjusted time and again --- effectively they were floating rates, just not as real-time as today, but in very.. slow.. motion. Also -- pretty sure they existed before at times and places from time to time. Probably never lasted well over 40 years before 1971 though. Brilliant move really, US, stuff the world with countless "redeemable" notes, then cancel redeemability :D That said, there is no law of nature that dictates that state treasuries should forever remain vulnerable to runs on their vaults. Even if they never inflate the paper, just by honestly trying to maintain a fixed paper=gold exchangability, the populace / debtor countries will always pay taxes / debts in paper and otherwise exchange their excess paper for the treasury's gold, until it's all gone. Countries and empires have gone through this time and again for centuries before "Nixon put an end to it" so to speak, and it didn't exactly crash the world (after a little bit of turbulence for a few years) or hamper economic growth or hinder technological innovation ever since. 43 years with some "financial crisis" regularly roughly every turn-of-decade (but those existed ever since "finance" as such began if we're honest).. The fixed-rate regimes were always conned by governments/treasuries sooner or later, so a floating rate really seems the more honest alternative and look, it kinda-sorta 'evolved' to that end after all! Turns out, that paper can be redeemed in metal for those few who really do still care about it is more important to them than the exact rate ---a true gold-bug cares not about it's "fiat price"!--- and this way, the central banks can keep their own stuff which they're heavily into themselves and send people off to the mines and markets. Not such a bad deal for all, after all.