" Money isn't metal or paper. It's TRUST"

15 min. into Niall Ferguson's online doc. about money, and he aleady nails the problem we have now.
Really worth a look, btw...
http://www.documentary-film.net/search/watch-free.php?&ref=225

( thanks to Democracyinkind for the link...very cool site )

It's only relatively recently that gold has had any industrial value (due to its electrical conductivity). You can go on about barter systems and so on but when you get down to it you're just replacing one unit of exchange with another. 90% of such arguments are equivalent a promise to improve dietary health by changing the tableware.

The traditional requirements of a monetary medium are:

1) Universal acceptance
2) Relative scarcity (but not too rare)
3) Durability
4) High value can be represented by small amounts of the medium, making it portable and easy to store
5) Cannot be artificially produced

Theoretically, gold meets all of the above requirements. No other monetary medium does. This is one reason why gold was the world's money for thousands of years. And if you think that one medium is as good as another, then I'll gladly trade you one ounce of my copper for one ounce of your gold. Or one ounce of wampum shells for one ounce of gold. Or one ounce of Zimbabwe dollars for one ounce of gold.

And gold has had industrial value for quite some time. The problem was that its value as a monetary metal was far higher than its value as an industrial metal. Much cheaper alternatives such as copper and silver were available.

...if you're like me and don't always notice when you get a new one.