Towards a Tangible Value Economy

I don't know if it's the fact that politics has become too depressing for me, or my preoccupation with my new digital toys, but I'm still paying marginal attention to the news. On President Obama's plan to reduce the importance of Wall Street though regulation, my Libertarian Thought Leader of choice, Vox Day lays it out in one sentence:

So long as the paper money system exists, the easiest and fastest way to obtain more of it is to play paper games.

Regulating Wall Street beyond that of other markets, will only drive the brightest minds towards those other markets. The root cause of our dilemma is that the Federal Reserve Note has no tangible value. It is only an I.O.U. from the government to the people, based on the people's trust that the government will still be with us tomorrow, presumably to hand out more I.O.U.'s. It's difficult to see the government going anywhere any time soon, so the trust is maintained, if only slightly.

If, on the other hand, the dollar was backed by gold, silver, or any basket of commodities, it would take on a tangible value independent of anyone's level of trust. With a tangible valued currency, the best minds would gravitate to producing tangible assets, as that is where the most value would be. Manufacturing, intellectual property, even farming would assume a new importance. Who knows, newspapers might make a comeback.

It's an idea that used to work, and could be made to work again, if only our "leaders" would try it. What, real assets traded for real money with all having real value? Nah, just another wing-nut idea from the hinterlands.