> Fiat required trade to be based on gold first, a peg which was then broken.
Fiat is by definition not based on gold.
The term is [...] usually reserved for legal-tender paper money or coins that have face values far exceeding their commodity values and are not redeemable in gold or silver. [1]
What you are describing is the switch from commodity money (gold standard) to fiat, an objectively better system for many reasons. This happened in 1933 under FDR in the United States, not under Nixon as many of the tinfoil hat crew are wont to say.
What you're describing is at most - at most - a default on the government's obligations 89 years ago. Not a Ponzi scheme lol. Everything folks are suspicious of is a Ponzi scheme these days.
> Central banks can create infinite units arbitrarily.
Central banks do not create money. They at most indirectly affect the money supply via adjustment of interest rates and reserve requirements. [2] However their mandate under which they operate is to maintain low, predictable medium-term inflation targets and maximize employment.
This is like saying "well, actually, the Bitcoin core team can adjust the 21M coin limit up to an arbitrary value!" They could, technically, but there's a ton of reasons they won't.
> "Enforced by the legal system" perhaps means controlled by the FOMC.
No it does not. When you borrow money from a retail bank, say to purchase a house, they create new money that enters the system, paired with a negative balance on their books. The new money is backed by the demand of the issuer to re-pay that loan. As the loan is re-paid the new money is destroyed and leaves the system. The legal system enforces payments in these contracts.
> ...a dozen central bankers who make decisions behind close doors, nominated and chosen by congress I believe.
They are nominated by the president and appointed by congress. The Federal Reserve is an independent organization explicitly to separate capricious fiscal policy from the kind of stable monetary policy necessary for businesses to plan into the future.
They were created by an act of congress and can be repealed by act of congress. They act on behalf of the American people and are accountable to the American people. All decisions are published and documented along with full audits. Like the post office.
There's nothing more sinister or shady about the Fed than there is about the USPS.
Sure does spook people though.
[1] https://www.britannica.com/topic/fiat-money
[2] https://en.wikipedia.org/wiki/Money_creation#Central_banks