One of the things that kept inflation low was that the value of the USD was tied to an ounce of gold by federal statute. If you look at the Dow during the decade of the 60's and then look at it again in the 70's, after the restriction was lifted and the value of the USD was tied to debt instruments instead of precious metals, you'll see where the seeds for our situation today were first planted.
The downside of gold as a currency base? Deflation. If the population expands by 20 percent but the supply of gold stays the same, companies need to cut salaries or fire employees.
Governments like a little inflation, take debt out but pay it back with devalued dollars.
Thomas Sowell: There are no solutions, just trade-offs.
