You got it. There are superior ways to manage money supply. But the commodity-backed standard is the only one that Government cant cheat.
But what happens when the government prints more money than the commodity backed standard? It has happened in every society in history at some point.
With free trade globalization there is a supposed benefit of lower priced manufactured goods (untrue, unless you are labor theory of value like Marx and Riccardo). The trade off is a major trade deficit (for the more advanced country) and reduction in real wages because of the shared division of labor. But with the currency being devalued, you lose any hope of cheaper goods even under socialist labor theory of value; commodities surge in price and everything becomes MORE expensive than it would have been with protected trade (protectionism) or even autarky (no trade).
Money has to be pegged, by Constitutional Amendment, to some fixed weight per dollar unit. The systemic problems you've eluded to can only be solved through grassroots Re-education and Restoration of the Country's Founding Principles. Otherwise, we're done. 2012 is shaping up as a big year. North American Integration and AMERO by then....
Which underscores why a recession led by the Worlds economic Superpowers will prove especially severe. Devaluation isn't the end of the World when done in moderation. China hasn't crushed the Yuan, but rather kept a steady peg against the Dollar... And predictably, their economy is undergoing massive fundamental strain from that commitment. Japan is a better example. Pull a USDJPY chart from 1986 onward. Their dollar devaluation cut the exchange rate in half, created a massive RE bubble, which the BOJ unsuccessfully tried to inflate out of. Sound familiar? When fiat booms push RE, prices, commodities and wages into ridiculous territory, they must move back to fundamental value before the economy can make another REAL push forward. Otherwise, we'll do 1970's Stagflation. Most commodities are priced in USD, not YEN or EURO.....