Asset backed currencies have been the ONLY succesful models tried. They stood for centuries, none ever "failed" they were all replaced by fiat systems.

The dollar was removed from gold backing in 1971, but it was weaned from gold onto oil and the "petrodollar" was formed, it was a brilliant plan and when put forth to Saudi "leaders" they realised that if they got in on the ground floor of the pyramid scheme they would greatly benefit.

Fiat moneys have ALWAYS failed. The ability to "print your way out of trouble" is in fact "printing your way into trouble" and will always end bad for the users (good for the bankers).

Fiat money ALWAYS ends up being backed by debt, that is what fractional reserve banking is, when you go into a bank and borrow $100, that bank is allowed to create $1000 out of thin air and loan that out to other users. This $1000 is not moved from some reserve to the bank, it is literally created out of thin air at the press of a key.

The word "Fiat" is latin for "It is" or "Let it be". Like a magic utterance allowing something to be created from nothing.

As to the thread title: Inflation and Deflation are only good for those that wish to control the money supply. Keynes would have you believe that this is necessary, but history tells us that it ALWAYS fails. It fails in a very lucerative way for the bankers and a very painful way for the majority of its users.