Although many gold buyers readily accept that “gold is real money,” few can explain why gold is real money and why moving away from gold as money to fiat money distorts economic activity. The distortion being a boom followed by a bust, and the size of the distortion being determined by the amount of the fiat money creation.
For those interested in why gold is money and why an increase in production of gold does not distort the economy, read Frank Shostack’s “Why Gold-Backed Money Doesn’t Bring Booms and Busts.”
The essay is posted on Mises.org, the website of The Mises Institute, where Shostack is an Associated Scholar. Mises.org posts essays by learned scholars who understand and can explain Austrian economic theory in ways that laymen can begin to grasp it.