From this we note that the implied interest rate on gold is the lowest, over the long term, of any currency on earth. That's because gold is the highest-quality currency on earth.

The United States' Founding Fathers understood this well. In the constitution of 1789, they mandated that gold would serve as the basis of money in the United States. The United States stuck to this principle for 182 years, until 1971. During those 182 years, the US never suffered permanent, large-scale inflation. Immediately after decoupling the dollar from gold in 1971, inflation ignited in the US and around the world. The dollar lost about 90% of its value vs gold that decade, and prices adjusted accordingly. It took 20 years to recover from the disaster.

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Between 1823 and 1914, 91 years on the gold standard, the yield on the British government's Consol bonds was never above 4.0%. These bonds were of infinite maturity. This one statistic tells you all you need to know about monetary and macroeconomic stability under the gold standard. If two currencies are pegged to gold, then their exchange rates must also be stable. Despite all the thousands of PhDs issued and papers written over the past decades, no government or mainstream economist has ever been able to touch this track record. They don't even try.

Floating currencies have been around for millennia. The attractions of currency manipulation are so great that it seems there's always someone who wants to give it another try. The philosopher Plato apparently helped the ruler of Syracuse issue a floating fiat currency in the year 388 BC. The results of that project, and all of the hundreds that followed over the centuries, were exactly the same. They eventually failed, and the successful governments returned to gold as the basis of their monetary affairs.

Godl: A barbarous relic

The thing that I could never get is this:

The principle of a gold standard is elementary: gold is stable in value...

Why?  What makes gold so special?  What gives it its almost divine status?  Surely water is far, far more instrinsically valuable to humans than a shiny, ductile, malleable and sectile metal?

Truth unfolds in time through a communal process.