It is the central bank, and only the central bank, that works as the government's money machine, and this makes all the difference. Now, it is not impossible that a central bank can exist alongside a gold standard, a lender of last resort that avoids the temptation to destroy that which restrains it. In the same way, it is possible for someone with an insatiable appetite to sit at a banquet table of delicious food and not eat.
Let's just say that the existence of a central bank introduces an occasion of sin for the government. That is why under the best gold standard, there would be no central bank, gold coins would circulate as freely as their substitutes, and rules against fraud and theft would prohibit banks from pyramiding credit on top of demand deposits. So long as we are constructing the perfect system, all coinage would be private. Banks would be treated as businesses, no special privileges, no promises of bailout, no subsidized insurance, and no connection to government at any level.
Gold is portable, divisible, fungible, durable, and has a high ratio of value per unit of weight. It is as compatible with today's economy, driven by information technology and lightning quick financial transactions, as it was compatible with the 19th century economy of heavy industry and agriculture. It is not technical limitations that prevent the dollar from being redefined as a unit weight of gold, but political ones.
I have no doubt that a gold standard can be completely restored, no matter how unfavorable the current environment appears towards its restoration.
Llewellyn H. Rockwell, Jr.