> The U.S. domestic economy unlinked in 1933, permanently. Only international trade continued to use gold-backed currency, and it is that aspect which was finally eliminated in 1973.
If the iternational market for dollars is still linked, in spite of domestic unlinkage, there is still some level of grounding, because of the possibility of commodity arbitrage (both directly and indirectly). Certainly there was inflation during that era, and the dollar slipped so far that it led to Nixon's actions... But for the most part the standard of living was able to keep up, largely thanks to technological and infrastructural improvements. Moreover, you couldn't soak the bankers/financial sector quite as easily because of the international connection to gold (and international currency arbitrage is more important to bankers and finance than your average domestic schmoe).
> Likewise you have mixed up your cause/effect for the Great Depression
Sorry, I should have said, I believe if we hadn't unlinked it we would have only had a shorter, not-so-great depression (emphasis on great, not on depression). Obviously, I'm aware that the unlinking came after the stock market crash of 29.
> Holding currency to a gold standard by some fixed price would be called "price control" in any other context, and we already know price controls to be bad policy.
No, price controls are setting the price relative to a standard that's backed up by guns (guns = "control", as in, if you don't do what I say I can shoot you, or point a gun at you and take you to jail). Dollars are already backed up by guns, so the notion of 'price controlling' dollars makes no sense. If anything, you want to back dollars by gold to keep the people with guns honest.
The dollar is already an 'amarket' entity by virtue of its backing by the state. A better example of 'letting the market decide' in the context of 'valuing currency' would be letting the interest rate float, without manipulation, which is also something we most certainly don't do.
>The biggest irony for me with regard to Bitcoin is that it proves the fiat concept.
There are goldbugs who insist that Bitcoin is silly because it's not tied to anything with 'intrinsic value'. That's one interpretation of the fiat concept. But I (and many others) interpret fiat to mean 'by a higher power' (by analogy to fiat lux) except in the general case of state currencies, the higher power being the authority of the state.
Indeed a gold-backed dollar is still a fiat currency, albeit a more responsible one.