First, it's worth remembering that the USD was ostensibly backed by gold up until one generation ago, until the Vietnam War. No kidding. There was some amount of Gold reserve to back dollars, that's why 'Fort Knox' exists. So even the USD was 'just a paper you could trade for gold'! Though really, you couldn't, it was a weird theoretically reality.
Now (and really even then) USD is only as good as the integrity of the US Gov and the Fed. If they crash, USD won't be worth the paper it's printed on. In addition, mechanically, physical currency takes a lot of effort to keep going, and with nobody doing that, well it goes kaput.
Digital currencies rely on various layers of trust: networking, security, legal, financial, regulatory, institutional. If any of those break, we can't use digital currency. Technically, there might be some kind of super cook block-chain that could work without needing the internet, surely, but it's too complicated for regular use as a currency. Maybe for larger transactions between fiefdoms!
But gold and other precious metals would probably be used as s currency until institutional trust could be built back up into institutions so that they could have real fiat currencies.
If knowledge and responsibility were very strongly maintained at the local level, it's entirely possible for regional economies to maintain their own fiats. This requires exceptional knowledge and fiscal/monetary discipline.
If you have a populist, dirtbag leader who can corrupt the integrity of the monetary system, it will destroy everything. This is the source of most hyperinflation scenarios.
>Though really, you couldn't, it was a weird theoretically reality.
This is not how other countries saw it.
From https://en.wikipedia.org/wiki/Exorbitant_privilege : "In February 1965 President Charles de Gaulle announced his intention to exchange its U.S. dollar reserves for gold at the official exchange rate. He sent the French Navy across the Atlantic to pick up the French reserve of gold and was followed by several countries. As it resulted in considerably reducing U.S. gold stock and U.S. economic influence, it led U.S. President Richard Nixon to end unilaterally the convertibility of the dollar to gold on August 15, 1971 (the "Nixon Shock"). This was meant to be a temporary measure but the dollar became permanently a floating fiat money and in October 1976, the U.S. government officially changed the definition of the dollar; references to gold were removed from statutes."
There's some more detail to this. There was kind of a gray area between WW2 and the end of the Bretton Woods arrangement in 1971. After 1971, the Federal Reserve Note could no longer be converted into gold by other countries' central banks.
The average citizen, after the 1930s when the gold standard was abandoned (and for a time, private gold ownership was literally outlawed and people were obligated to turn all their gold in) could not go to a bank and say "give me my $ worth of gold" but other countries could. Between the Federal Reserve Act of 1913 and that, though, one could actually redeem a Federal Reserve Note for gold.
Now the US dollar's value is assessed by comparing it to a basket of other nations' currencies and dollar foreign policy sometimes favors a cheaper dollar. An analogous situation happened with the Swiss franc when the Swiss central bank deliberately devalued it to make Swiss exports more affordable and attractive to buy again.
In 1980, the Hunt Brothers cornered the commodities market for silver by buying up billions of dollars of it and "artificially" pumping the price up over 50$/oz. This is a good example of where metallism (backing a currency with a commodity like gold or silver or both) can fail as long as the commodity itself can also be traded. It would be quite difficult to do the same to the gold market though since silver has many more industrial uses.
The currency of a nation is only as good as the government that issues it, which in a democratic form of government means constant vigilance by voting citizens over the stewards of it.
I'm not talking about relying on the US dollar as a currency, but relying on physical US dollar bills as a medium of exchange,just as you would on gold coins/bars.
How is it easier to print a realistic dollar bill, with all the easy to test security measures, than it is to alloy some gold with something else, or use some other golden substance?
And no, anything dependent on computers (an especially on a country's worth of electricity) to function is not a safe bet if we are imagining doomsday scenarios.
Tungsten, mainly. Anti-counterfeit testing now includes ringing the purportedly gold coin like a bell, if it passes the density test. A clad-tungsten counterfeit will have a duller, less sonorous sound.
This is where all those hours of listening to drummers drone on and on about the metallurgical qualities of cymbal brass--and the audible differences between Paiste, Sabian, and Zildjian--can come in handy.
