The most important thing about money is; can be count on its value and the value is stable over the time.

Underpinning the value of money

Fiat currency is legal tender whose value is backed and underpinned by the government that issued it.

Why a fiat currency is better economic policy 

The most important aspect of a currency is the relative stability of its value. And while there are certainly more aspects to inflation than just the currency standard, it’s a major factor in monetary policy and a government’s ability to control the money supply.

What gold advocates ignore 

Those who advocate for gold will think that fiat currencies aren’t really “worth” anything, since there isn’t anything tangible that underpins its value. That’s really not a very accurate description of a fiat currency, versus a gold standard.  And gold hasn’t exactly been stable or reliable in recent years:

And since September 2012, gold has fallen 30%, while the S&P 500 has seen total returns of more than 77%.

Stability is key

A fiat currency is a better alternative, but as long as those pulling the levers of monetary supply keep the balance between supply and demand stable.

Currency is a tool of trade. People tend to hoard gold and silver when things are uncertain, and that’s harmful when it limits currency flows on a large scale. Removing the relationship between a currency and commodity doesn’t create “worthless money.”

It simply keeps panic from causing greater economic harm in times of crisis when people hoard the underpinning of a commodity currency and stop the wheels of commerce. And that makes a fiat currency far better than a gold standard.