Historically… gold as a currency has had all the problems of Fiat Money. Aside from the fact that it has no intrinsic value… more of it can be mined and is continually mined. The organizations mining it have an advantage and have historically manipulated the supply to their advantage. The US government at one point confiscated all the gold (a crime). It made itself the sole legal purchaser of gold in the US. That only shifted and further centralized control of gold rather then disperse it. Few people know, that when the US govt went on the Gold Standard, YOU the individual, where no longer allowed to own it. Executive Order 6102 required U.S. citizens to deliver by May 1, 1933 all their gold coin, gold bullion, and gold certificates to the Federal Reserve. An exception of $100 in gold coins was allowed. This does not seem fair or constitutional to me.
Gold historically has been subject to scams such as mixing it with other metals. The only system that is not corruptible is a barter system where you trade actual commodities. Problem there is that the barter system is too slow and cumbersome for anything above a “village level” economy.
The current Fiat system is supposed to be backed by real assets as each dollar is born into existence via debt, which is backed by collateral on real assets.The only flaw in this system is that the government can create/borrow money without putting up real collateral, thus debasing the currency. This is no different then when Rome use to mix other metals into its gold resulting in inflation and instability back then too.
The solution is simply for government to end their print and spend policies. This is the same advice they would give to any third-world nation. The cost of this is that money will always seem in short supply. Both government and individuals will have to make hard choices on how to spend the little money they have. In the short run we will be giving up aggressive boom cycles in favor of long term stability.
(Note: Permission to reprint and link with credit to Bill Tsafa is hereby granted)