Board Thread:Organizations/@comment-24285185-20131218031450/@comment-24285185-20131218041641

http://en.wikipedia.org/wiki/Gold_standard

The above article explains the gold standard, where gold is used to back the money in circulation.

If we have 60 US dollars worth of wood for example, and we have 30 AU dollar notes in circulation, then each AU dollar will be worth 2 US dollars. Or if we flip the numbers, 30 USD and 60 AU notes in use, then an AU note will be worth 50 US cents.

The central bank would use the value of the wood to assign value to the bank notes it releases. This protects the AU from hyperinflation. We should probably come up with a fixed amount of whatever material we will use. If the economy grows enough, then we can raise the amount that can be used and more bank notes can be printed. This makes the currency even more secure.