W, This is, on the surface, true. Paper money can be tied to anything. Anything! The problem is that, in this instance productive capacities of nations change over time. I am reminded of a lecture given once by the late Kennedy Gammage in which he stated, "The moral fabric of any nation can be judged most quickly and accurately by the quality of it's money."

So yes, fiat currency can function, but its function is limited by the ability of the human beings using it to stay honest and upright, and this can never be assured or even hoped for on a large scale. Bull