suppose Hong Kong dollars weren’t “money” in some legal sense. Authority would not accept them; times I went Earthside had to buy Authority scrip to pay for ticket. But what I carried was Hong Kong dollars as could be traded Earthside at a small discount whereas scrip was nearly worthless there. Money or not, Hong Kong Bank notes were backed by honest Chinee bankers instead of being fiat of bureaucracy. One hundred Hong Kong dollars was 31.1 grams of gold (old troy ounce) payable on demand at home office—and they did keep gold there, fetched up from Australia.
Fiat is trash money. Unless forced upon the world as the global reserve currency (the least trashy of currencies) no one would accept it. They are IOUs that can only be redeemed for more IOUs, perpetually debasing in value by design. Currency pegged to hard assets like gold mitigate the "trashiness" significantly by ostensibly limiting the supply of IOUs that can be created at the rate of the % of more gold that is mined per year (~2-3%, which should in theory be canceled out by GDP which increases at about the same rate, leading to stable prices). Unpegged to hard assets, the supply of IOUs is limitless, invariably leading to hyperinflation as the temptation to print fiat money to fund gov. spending cannot be quelled. The alternative is to overtly tax citizens, which doesn't get politicians into office as no one wants to be taxed more.
