Value cut adrift in a sea of paper money

The gold standard had, for centuries, put limits on the quantity of paper money in circulation. All currency units were a claim on a sliver of gold, however small. Gold was thought to be a natural money: divisible, durable, and immune to replication by government. Experience with fiat currencies had been terrible too; as Voltaire surmised in the 18^thcentury, "[in] the end fiat money returns to its inner value-zero."

Abolishing the gold standard was meant to free up gold but central banks still hold about one fifth of the world's 166,000 tonnes of gold and have bought even more since the financial crisis. Private investors hold another fifth. More than 70% of the total foreign exchange reserves of the United States, France and Germany are still in gold – so much for 'alternative uses'.

Perhaps it is only ever possible to leave the gold standard de jure.

It was also meant to make running the money supply cheaper – gold mining was routinely mocked by Keynes. But far from withering away gold mining has grown, spurred on by ever higher prices. And a fiat currency system is not cheap, either: thousands of highly educated bureaucrats spend their lives poring over old prices when they could be productive elsewhere.