Interesting insight from a guest writer at Baseline Scenario:
But I do know that in the year 2160 (give or take a century) gold will no longer be viewed as money. Why? For the same reason that all commodity based money systems have collapsed—technology made their production too cheap. Gold bugs like to talk about how every paper based money has failed (or will fail), but they ignore the equally miserable track record of commodity based money systems. For example, the cowry shell, which was used in ancient China and India, a weight of barley (the shekel), copper, cigarettes, or that most insidious of monopolistic money systems—salt.
So how did these money systems fail? Did their cultures implode? Did their governments fail? Quite the contrary, all commodity based money systems were destroyed by one simple factor—technology. At some point, technology enabled low cost production of the commodity, and the currency collapsed.