I think you are right on the reasoning or rather more accurately the "spin" put on it to get the average citizen to buy it. Nixon's media spin was that the dollar was so strong that it did not need the backing of gold. In reality the truth was the US was bankrupt and if all the foreign countries had redeemed their paper currency that was backed by gold, of which we had maybe actually 20% (not sure about the exact amount), there would have been a gold window "bank" run on the federal reserve and The USA would have been in default. Instead of that public disgrace we instead just told the rest of the world, sorry Charlie, no gold, you're stuck with the paper. Being a super power and the fact that we helped a lot of the rest of the world out of a world war depression in prior days what were they going to do? Invade us?

Yes, some say that the gold standard would hold us back. Well if we had been "held back" our growth would have been slow, steady and measured rather than the huge bubbles we have had with the dot.com bust and now the housing bust. When you print lots of money, it ends up going somewhere. If you are on a gold standard you can only print as much money as you have gold to back, or at least a fraction thereof if on a fractional reserve. Right now we have nothing, other than the threat of hyperinflation, keeping us from printing unlimited amounts. And there is a good chance we eventually will.

I can't remember how much gold is added each year to the earths above ground total but have read it somewhere. I think it is something on the order of 2-3%. That would not be a bad growth rate of the money supply.

John