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Yes currency can go down, inflation can make the costs of good go way up.
Gold still is not stable, never really has been stable - hence price fluctuations.
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Anything that have monetary value fluctuate, but gold performance is much supeiror than the damn US dollars:
gold spot price
gold vs us dollars
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Would have to check on that whole gold was used as a way of exchanging monetary funds before currency existed- I seriously doubt that and you may want to look up the word currency and how it came to be. If anything that would of been spices.
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You really need to review history, gold exist long before paper money. People used to pay taxes with gold to the king in England in the old days:
http://en.wikipedia.org/wiki/Gold_standard
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Assuming currency becomes worthless, you would be hedging that you can use gold to buy what you need i.e. use it as your currency.
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That's easy, you pay per ounce of gold. Example, you can buy some things buy things online such as an annoymous hosting with digital currency. You can even get an ATM card and exchange digital gold to cash:
http://www.londongoldexchange.com/
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For long term security, gold is already at record highs and unless you really think it will go higher without falling at all. That too is something that has passed its prime and should of probably been bought a year or more ago. Even then being fully into gold would be very high risk.
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That's true, but the US is in a recession, the gov't is printing money, and the Chinese and countries that bought the US dollars and holding trillions of US currency will probably have to dump it to shore up their own financial problem. As the graph show above this could make gold go higher. The US is in a financial mess, it will be years before it over, so gold is safe, and like I said as long as terrorism exist, it will be safe.
Beside the legendary investor George Soros perdict long ago gold will go higher, fortunately for me I follow his advice and bought some. He mention gold isn't finish and most likely go as high as $1800/oz. Current spot price is around $750. OK, I know i'm being too technical, but search George Soros and gold on google and you'll find the answer why it going higher.