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Gold Too Variable to be a Currency?

May 25, 2011 1:13 PM ET
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Someone wrote an article bashing gold as too variable to be a currency:  seekingalpha.com/article/271765-gold-too...

But how about the U. S. dollar for that matter? Take a look at this chart (stockcharts.com)--dollar v. U. S. bond v. gold:dollar v bond v gold

The dollar dropped nearly 1/2 of its (nominal) value from 155+ to 85 between the beginning of 1985 and the end of 1987 and 40%+ from 121 to 70 between the top in 2002 and the bottom in 2008.  If paper currencies account for most of the world's wealth, is this kind of fluctuation acceptable?

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