"The consequences of deflation IMHO are overblown -- eventually people will need purchase goods and stop saving/hoarding."
Eventually, yes, but as a noted economist once said, in the long run we're all dead. The point is that there's a real and significant economic cost to deflation, one that is much greater than the economic cost of inflation to an equivalent degree.
"Massive inflation on the other hand, Zimbabwe today, or Weimer Germany (getting paid 3 times each day) are real threats and will rob the life savings of anyone who doesn't have the money invested or converted to real assets."
I don't see any risk of that happening to the currency in a major country that isn't completely corrupt or totally broke. One thing the Fed is able to do is prevent hyperinflation. Mild inflation, which is what we've had instead, is probably the best long-term target for currency to take.
"I agree legal tender laws have existed for a long time, but if you advocate competing currencies then legal tender laws will quickly chase the good money out of the system."
"Competing currencies", as you put it, is simply a barter system. There's no way that civil law or tax law could even work without legal tender laws, and in any case, going back to barter would be a bad solution to a non-problem.
"The US went off the gold standard in the 1970s and gold was still used for things besides money so I don't really see how that argument holds water."
The US has been cheating on the gold standard since the FDR administration anyway--and there's been enough economic growth since then to create a really big wealth-to-gold ratio compared to what it was back then. If you take the level of M2 in the United States and divide it by the US gold reserves, which is what a US return to the gold standard would require, the resulting price of gold would be orders of magnitude above what it is now and what is affordable for any feasible purpose.
"Do you mean like how it's currently managed now? how it was managed in the great depression?"
As you yourself just noted, during the Great Depression we were on the gold standard. That was actually one of the causes of the Depression.
All money is simply a barter system; money is a commodity that is traded that, there is nothing stopping and in fact many stores do have prices in dollars and euros, etc. So there is no problem with competing currencies, the problem you mention with taxes is easily fixed by specifying in what currencies your taxes will be payable in. Eventually we settle on 1 or 2 currencies, but if there was ever a problem there would not be legal reasons for creating a new one.
"I see runaway inflation as a serious threat to the united states, and I think it is very possible."
Do you have any historical evidence that it's happened in our system or in other systems like ours? The main flaw I see in your argument is your conflation of mild inflation with runaway inflation.
The kicker is, runaway inflation would happen just as readily even under a gold standard if major new gold sources are discovered, or if another major power sells their gold reserves. We have even less control over that risk than we have over the Fed.
"All money is simply a barter system..."
Yes, except you have to have a common medium of exchange that's widely accepted, and a situation without legal tender laws would eliminate that.
The thing is, once you define what currency you accept taxes in and what currency legal judgments are determined in...you have legal tender laws by definition.
1. Your first point is incorrect, when a massive amount of gold is found there will be inflation -- but it won't be runaway, prices will quickly come to reflect expected future increases in the monetary supply whereas when the government prints it there is no limit. That is why people advocate tying it to something tangible. To limit their ability to inflate.
2. You can define that you accept taxes in the following currencies; and then when defining contracts you can specify what you will be paid in. The legal judgements would support that.
Eventually, yes, but as a noted economist once said, in the long run we're all dead. The point is that there's a real and significant economic cost to deflation, one that is much greater than the economic cost of inflation to an equivalent degree.
"Massive inflation on the other hand, Zimbabwe today, or Weimer Germany (getting paid 3 times each day) are real threats and will rob the life savings of anyone who doesn't have the money invested or converted to real assets."
I don't see any risk of that happening to the currency in a major country that isn't completely corrupt or totally broke. One thing the Fed is able to do is prevent hyperinflation. Mild inflation, which is what we've had instead, is probably the best long-term target for currency to take.
"I agree legal tender laws have existed for a long time, but if you advocate competing currencies then legal tender laws will quickly chase the good money out of the system."
"Competing currencies", as you put it, is simply a barter system. There's no way that civil law or tax law could even work without legal tender laws, and in any case, going back to barter would be a bad solution to a non-problem.
"The US went off the gold standard in the 1970s and gold was still used for things besides money so I don't really see how that argument holds water."
The US has been cheating on the gold standard since the FDR administration anyway--and there's been enough economic growth since then to create a really big wealth-to-gold ratio compared to what it was back then. If you take the level of M2 in the United States and divide it by the US gold reserves, which is what a US return to the gold standard would require, the resulting price of gold would be orders of magnitude above what it is now and what is affordable for any feasible purpose.
"Do you mean like how it's currently managed now? how it was managed in the great depression?"
As you yourself just noted, during the Great Depression we were on the gold standard. That was actually one of the causes of the Depression.