Maybe allow loan system in diplomacy, which would look like following - borrowing certain sum for certain amount of turns (5, 10 - ?) with interest in % agreed upon both sides, and penalty % per turn when debt can't be paid in time (optionally). Maybe make it so that loan amount (total loan from multiple sources) cannot be higher than amount GNP x2-3-4?
When agreement is made, there will be agreed period during which loan taker should accumulate money, after which money/science slider moves to gold and gold automatically substracts to creditor (this can be done for few turns till payment and % are fully paid out). Also % per turn in case of delaying debt should be added too. Declaring war upon creditor should not effect loan.
Also, as an option, units and cities (we can trade them now anyway) could be made as objects of safety deposits for loan (as alternative to % penalties if not paid in time), so creditor can hold them to himself if loan isnt paid in time.
I don't think I could ever get the AI to be competent with such a task.
Countries don't really do this anymore. They do print paper money, but only a tiny fraction of the money supply is paper (and they borrow the money they're printing before they actually print it, rather than just issuing it out of the blue).
There was only really a very short period of time (between the gold standard and Bretton Woods - from 1931 - or 1933 in the US case - to 1946) when countries were just printing money backed by nothing. Under the gold standard they could technically print as much money as they liked, but this didn't actually increase the total value of their specie; they basically had to have more gold to do it safely.
It happened a lot more than that. Read up on the Confederated States of America, each state had their own currency, and some of them had massive inflation (see Southern states) to please the farmers (debtors), while others in the north had low inflation or deflation to please the merchants. Before Economics was well understood, Kings and Tyrants would often inadvertently or purposely increase or decrease the money supply. See Spain in the 1500's for this. They brought back lots of Gold from the new world, and it inundated the market, making the gold worthless, causing complete economic failure.
However, even if it had been limited to a short time frame, as you say, that doesn't exclude it from being a feature. Relatively speaking, Democracy has barely existed as a form of government. 98% of the time, humans have lived under some form of Tyranny. Does that mean we should exclude Democracy as a civic?
Actually some still do. It's consensus that is not smart to do it, but they still do. Not consolidated democracies like Brazil or USA, but totalitarian governments still finance their excesses printing money and building up inflation.
Back to the monetary slider: I think it might be cool, let's dig a little deeper.
1) The positive side causes inflation, the negative side causes decrease of inflation, not deflation. Also, if you keep going it back and forth, back and forth, this behavior would create an inertial inflation. People will just expect more inflation, because they know how irresponsible their government is. This expectation of inflation, by itself, creates more inflation, as much as people are indexing their payments to a inflation which don't happened yet.
2) As frekk wisely appointed, modern countries don't do it, they know it's harmful. So, let's control it by the monetary civics. The monetary slider will be active only with: State Coinage, Noble Metal Standard, Private Coinage and State Bank.
1.) Okay, you know more than me.
2.) Good idea. I agree with that. One note, if someone forces a universal currency in the UN, the slider should be removed, regardless of civic.
Instead of allowing negative gold per-se, what if governments could issue general bonds? Not via diplomacy, since individual bond owners are the largest market for bonds. Issuing a few bonds once in a while is fine, but having lots of outstanding bonds would flood the market and drive interest rates on future bonds up, as well as stifle the economy (e.g a negative modifier on gold production).
I imagine an "Issue Bond" button could be added to the Financial Advisor screen, with a customizable value, and it would give you the APR for it, and the time until the bond expires.