I recommend Nassim Taleb's The Black Swan on this topic.

Greenspan is a charlatan. Period.
That anyone would listen to him seriously is sad.
Here is a man who has preached about the taming influence of gold, and continues to privately advocate it, but still is so intent on keeping an appearance of sophistication that he betrays his essential economic philosophy.
Whether one advocates gold, silver, diamonds, or any other precious item as a basis for money as against the irrational nonsense of human & government tinkering is the point.
Wiemar Germany here we come.
Gold at $1000 p/ounce? Try $10,000,000!

frank,

No single commodity will do it any more. Technology is moving too fast.

Diamonds are more plentiful than sapphires. Yet they cost 10X as much. So obviously some one is manipulating the market. Plus the value is subjective.

Did you actually read what I wrote?

"Our current system is as good as is possible with people at the helm."

That's comparable to saying, "If I simply must be battered savagely and continuously by armed thugs, for them to use these Nerf-like bats is as good as possible."

Gold is no panacea; nothing cures all problems. But the search for a panacea guarantees that you'll miss the feasible improvements available.

Gold is the emergent money of all free market systems to date -- that is, all systems that have been unencumbered by legal-tender laws. Why not make use of the information, instead of speculating about developments that, by their very nature, cannot be predicted?

Were gold to become unbounded in supply at near-zero cost, it would almost certainly be the case that the enabling technology would involve transmutation. But the arrival of transmutation would effectively end all scarcity-based economics, possibly except for the cost of energy to run the transmuters. So there's no point in worrying about it!

Francis,

Actually we can predict some things. We know for sure that gold will lose its value once sea water extraction becomes feasible. (Biotechnology is a very good candidate for that - there are organisms with a preference for gold). It is just a matter of time. Asteroid mining will become practical. It is just a matter of time.

That is why a market basket approach to controlling the money supply is probably the best we can do at this time.

When technology was moving slowly gold was a pretty good idea. (Although it ruined Spain when they found they could steal vast amounts from the New world).

So is gold more valuable in a vault or in semiconductors? That is not hard to figure out. How about platinum? Better in refineries or in a vault? The same goes for all commodities.

Transmutation is not as practical as you imagine. Extraction is cheaper.

If this works out:

WB-7 First Plasma

We will be mining asteroids in 20 years.

The future is not hard to see. You just have to look.

The extraction of economically significant amounts of gold from seawater has been prophesied as a reason to abandon the gold standard since before FDR took the nation off the gold standard. It hasn't happened yet, and in all probability it never will; the concentration of gold in seawater is simply too low.

Similarly, the notion that mining the asteroids would undermine the gold standard is a fatuity only the scientifically illiterate could entertain. As a Ph.D. in astrophysics, and possibly the only one who haunts these environs, allow me to assure you: there's precious little gold in the asteroid belt. Very simple physics indicates that the heavier a metal is, the more likely it is to be concentrated near to its solar system's primary.

Get serious. Give me a reason why remaining with the current, politically controlled fiat-currency standard is preferable to returning to a free-market commodity-money standard today, not in some imaginary future, or learn to prattle about things you actually know about and understand!

In truth I understand nothing.

What I know is that so many impossibilities are now every day occurrences. Like heavier than air flight.

Since you are in aerospace I'm sure you understand the value of control systems in stabilizing a system for small to moderate perturbations.

========

But OK. Say we go to gold. How do you propose to manage the transition? How do you intend to match gold to dollars? How do you fix the exchange rate? How do you prevent gold runs when the currency gets less valuable than the gold backing it?

You know stuff fluctuates. When it took a month or three to balance the books - no problem. What happens when you can move trillions over night?

Say gold is at $1,000 an oz when you fix the rate. But it needs to be $10,000 an oz to match the money supply. No problem for the jewelry folks. It will be a huge industrial disruption.

Do you really want to kill the semiconductor business to go on the gold standard?

Well I'd love to see the plan.

In a monetary sense dollars are no longer a store of value. They are merely a medium of exchange. They do a moderately good job of that.

You want a store of value? Buy gold. It is available. Buy silver. Coin shops will sell you bars of it. Buy an oil well. Buy farm land. If you believe in tangible assets - get some.

Dollars are not stores of value. They are mediums of exchange.

BTW the dollar need only be stable in relation to the speed of trading.

However, the way to beat the decline in value of fiat money (assuming it happens at a modest rate) is to invest in productive assets. Factories. Oil wells. Producing farms etc.

Or buy shares in same. You can buy or sell those in minutes. You can move the dollars acquired in seconds. Assume 5% inflation. Assume 20 minutes to do the transaction you want. Your money will have declined in value by 2E-6 during the course of the transaction (you will correct me if I erred). Much less than the transaction cost.

i.e. For the layman: your million dollars will only be worth $999,998 dollars after your 20 minute transaction at 5% inflation.