> There's a reason why banks and states trade and store USD, instead of gold.
Suppose you accumulate a lot of debt in a currency backed by gold. Further suppose that you control that currency, and have the power to change or remove the gold backing. It becomes very tempting to, say, issue some new currency with lower or zero gold backing to wipe out your debt.
Which isn't a currency backed by gold then, its a fiat currency. A gold backed currency can easily inflate if new gold mines are discovered - it just uselessly doesn't track with the production of things people need.
Suppose you accumulate a lot of debt in a currency backed by gold. Further suppose that you control that currency, and have the power to change or remove the gold backing. It becomes very tempting to, say, issue some new currency with lower or zero gold backing to wipe out your debt.