With the rise of Rand Paul, the subject of the gold standard also rises. When choosing a standard of any kind, one must ask what makes that standard special. Gold has value beyond paper money because gold has held its appeal across civilizations across centuries and thus has a track record that transcends politics or any other human-conceived entity. Gold is also a nearly finite resource and thus its tradition as a hedge against inflation, but could conceivably be influenced if someone were to hit the Mother of All Mother Loads (see more below). Thus the desire for a gold standard is inversely proportional to the faith and trust we put in our governments, and ultimately reflects our trust in our fellow man.
Crude oil had very little value throughout human history and often could be found bubbling to the surface in places (even outside of Arkysaws), but once modern society found a use for it, its value increased dramatically. Increasingly gold’s practical uses are on the rise as it is an excellent conductor of electricity, it is very malleable as metals go, it does not corrode easily, it is a good reflector of radiation, yadda-yadda (see Wiki). As it becomes progressively valuable to industry, its value will begin to increase disproportionately to its traditional use as just a pretty ornament. This could hold significant implications for its traditional use as the last refuge for storing wealth. Also perhaps digging too deeply into science fiction, as technology advances we could reach a point where we can turn lead (or something else that is not gold) into gold. While the implications of that breakthrough could far exceed the impact on using gold as a wealth storage, it certainly would upset the apple cart of its traditional usage.
In today's world gold is usead as a financial utility as a hedge against inflation. As an "investment", gold doesn’t produce anything. It is simply a commodity. It just sits there. Worse, it costs money to keep it safe. Businesses produce the wealth that is temporarily stored in money and/or gold. Of course businesses have assets that must be maintained and protected, but they also produce wealth well beyond their maintenance value. If not for this business economic productivity, gold’s value would hit a ceiling and stay there. Personally, I feel that investing in gold is just short of investing in bullets so I would prefer to stay ahead of the curve. The implications for such a perception by governments is scary.
Ultimately, money doesn’t matter. Nor does gold. They are just middlemen, so to speak. What ultimately matters is the productivity of a society. The ability of a society to manage its wants and needs against its abilities is what is important. The only thing that really matters for an economy is the exchange of goods and services via some stable value-holding medium. If whatever that medium is, be it dollars, gold, or pairs of Paris Hilton’s underpants, its value can be expected to remain somewhat stable through the umm…period of the transaction, all is well economically.