There are several services that do that. I guess e-gold.com comes to mind. Even an ETF like GLD is not much different, except for the extra transaction via dollars when doing a purchase or sale. I guess the government wouldn’t be too happy, since all the capital gains taxes created by inflation would dissapear. They will have to raise taxes somewhere else.
Also, even while gold is different from regular commodities, it still used to cause these cyclical fluctuations from credit creation (inflation) to bust (deflation). The establishment decided that with managing a fiat currency they could better phase out those swings. Of course they never got beyond the “credit creation” phase either, since they didn’t have the guts to reduce the money supply (except hero Paul Volcker). So with gold you would have booms/busts, and then we would have to take our medicine from time to time (or prepare better ourselves). Doesn’t sound wrong either. Also, better than a basket of commodities in my opinion, since then again it becomes arbitrary, which ones to rebalance and when.
