You're not comprehending me at all on this issue, are you, Bobert? ;-)

Look, my friend, when currency is legally redeembable in something real at a given rate...and that something can be gold or silver or any other recognizable and measurable and valuable substance...it doesn't really matter what it is as long as people agree on it as the standard and have a pretty accurate idea of how much of it there is available...

Then the paper currency has real value! And it cannot be endlessly inflated beyond reason by unscrupulous lending institutions creating it out of thin air, because they would be obliged to pay it off on demand in something REAL...which means they would have to limit how much of it they create and they'd have to have reserves of something REAL to back up the damn paper money. And that would prevent them from getting away with their pyramid scheme.

Capiche? This goes for governments too, and they know it, which is why having gold reserves has always been vital for societies with a strong and healthy economy.

Dollars once were real, when they were redeemable in given amounts of gold and silver. They aren't real any longer. They're no more real now than Monopoly money is, and that has happened because the money was turned into Federal Reserve Notes which aren't redeemable in anything real at all...because they ARE Monopoly money...created by a monopoly...for the purpose of enriching that monopoly.

As long as we all go on pretending that the Federal Reserve Notes are real...then the bubble expands, the monopoly grows richer, and the public grows poorer (gradually...so you don't hardly notice it...except when a recession hits).