If the value of coinage is intrinsic to the value of the metal of which it's comprised, then all you do is get people nipping stuff of the edges and/or debasing the currency, so you end up with the same problems, inflation and lack of confidence/trust in the currency, so there's no great improvement. The moment you've moved to paper money it's all about abstraction; this ain't the problem; papaer money is essentially smoke and mirrirs and based on confidence, but as i said its a tried and tested trick, whether it's backed up by gold reserves, currency reserves or just sound financials (ie, don't keep printing the stuff to get out of trouble). The problem is when financiers believe in alchemy as has happened over and over again. Nutmeg, tulips, dot coms, sub prime mortgages, yadda yadda yadda. Reality will always catch up in the end.