|A concise summary / explanation of 'Freegold' theory...|
The problem is that there simply aren’t enough physical goods in the world to satisfy the demands of all the money and other paper wealth that exists. What would happen if everyone decided to get rid of money and other paper wealth and exchange it for cars, houses and other goods? There aren’t enough goods to satisfy all the money and paper wealth that exists. This means that much of the “wealth” represented by all this paper is non-existent. Plain and simple.
Hence the system is bound to collapse, because it is essentially a Ponzi scheme, and Ponzi schemes cannot last forever, because sooner or later an “investor” makes a claim that the Ponzi scheme cannot satisfy...