I personally think that fiat money is dangerous. I think all currency should be backed by the gold standard, but obviously that is not the case and it is not the standard America has chosen. I think fiat money causes unstable markets and leaves too much room for corruption. There's not much we can do about it though.
I believe every currency should be backed by the gold standard. If a currency is not backed by gold than it is a fiat currency. Fiat currencies are prone to inflation, since there is no gold backing, governments can print as much currency as they want and therefore the value of the currency can plummet.
I always hear this question posed in several different ways, and a lot of people agree that we should. I do not understand this. Gold is a limited resource in a world where there are a growing number of people who use currency. You can't have enough gold to do this.
No, every currency should not be backed by gold. Systems such as the U.S. monetary system could not function if every currency were backed by gold. As it stands, during periods of recession or inflation, the Federal Bank has to increase aggregate demand or reduce aggregate demand, and it does so by controlling the quantity of money circulating through the economy. By reducing (or increasing) the demand for money itself, we can quickly respond to overinflation or deflation. If we were on the gold standard, the modern economic system as we know it would become unfeasible.