ah Micro....
This has never, ever actually existed. Most of the dollars in the money supply are not physical dollars. You cannot eliminate that unless you eliminate fractional-reserve banking, and if you did that you would kill capitalism.
Yes, this has existed, that is a gold standard. Under a gold standard every piece of money must contain it's face value in gold. Everything else is a note which reflect it's value in gold. A 1$ gold coin contains 1$ worth of gold. A 1$ gold note represents 1$ of gold held in reserve backing it and available for exchange. If you make those electronic it doesn't matter in the slightest. Each and every single denomination must be traceable back to the gold backing it. And no one said each dollar is a physical dollar, but each one represents one issued by the fed, they don't magically come appear in the monetary system.
And all money is a commodity. Including the fiat money you're using now.
Currency"money" is nothing more then a commodity standardised for ease of use. You just identified one of the main advantages of our paper money. We control the commodity, any other be it gold, silver, oil, or bull excrement others control it as well giving them direct control over the value of our money.
Except for the Great Depression, stagflation, and this current thing?
You mean like the several depressions and recessions we had while still on the gold standard? Some arguably as bad or bigger then the great depression? All of which this current recession doesn't come anywhere near to?
Except for the growth in Federal government powers and influence?
You mean like the several jumps while still on the gold standard? Or the rise of tyranny in other nations all throughout history by countries who used a gold standard? Yep, the whole rise of Ceaser and Augustus....damn that fiat money.
It's a well-known theory that fiat money (and state-owned central banking in general) is the root cause of the boom-bust cycle as such.
Key word Micro, key word. I can theorise that there are really alien overlords all around us, it's just that we can't see them because they don't want us to know. And they shoot these messages out to keep us more or less docile. But with these special glasses, we can see them! Anyone seen my bubble gum?
Mismanagement, poor lending practices, and living on credit caused our current bust. It has nothing to do with fiat money or centralised banking. Further mismanagement and socialist practices are continuing and worsening it, not fiat money or centralised banking.
You are constantly mistaking poor management and idiocy of the fed, with fiat money which works just fine when properly issued and managed.