1.It is correct that the price of gold varies. The price of everything varies in a free market. However, I'd rather have something vary as part of supply and demand, rather than a process of government regulation.
You'd rather use as currency a medium whose value can be changed very easily by another country? Inept as those handling the money now, I'd rather have them doing so then Russia or China. At that point any country with a large enough economy to do so can flood the market with gold, therefore devaluing it, therefore devaluing our currency.
2.A Central Bank is not just a place where they print money. In effect, it is a regulatory body that controls the entire banking system, and, in effect, the economy.
As long as the market remains a free one, it's hard to argue the government can regulate with paper money any more easily then with a gold standard.
3.Most money is not green pieces of paper. The green pieces of paper constitute a mere fraction of the money supply altogether. Most of the money supply is what economists term 'inside money' – derivatives, loans, and obligations maneuvering inside the banking system. For the central bank to control inflation, it must control these as well.
No, it only has to responsibly control how much it prints. Money doesn't magically appear from thin air, if the presses aren't turned on, no more money pumped in, inflation is kept low. There doesn't need to be direct control over the entire economy in order to avoid massive inflation.
There would be no central entity capable of engineering a screwup on this scale.
Sure there would. The government could just as easily screw up our economy if it had a gold standard. As could any other entity with a large supply of gold to flood the market. That is the very heart of the problem in a system that is based on the value of a commodity that is traded openly on the world market.
1.Most of the US economy today is NOT greenbacks, as you full well know. In a gold (or any other non-fiat economy), it wouldn't have to be entirely backed by physical gold bricks either.
While there may not be one physical bill for each dollar out there, money is money. Regardless if it is a piece of paper, a metal coin, or a piece or code in my banks computer system. All the forms represent the same thing- a certain amount of whole or partial dollars. On a gold standard money would need to either be physical piece of gold or something representing a certain amount of gold held in reserve by the issuer (if that note is paper money or electronic in a bank doesn't matter). While it wouldn't need to be a piece of gold it would need to represent a piece of gold somewhere....otherwise it isn't a gold standard.
Imagine the jump gold prices would take if any one nation announced even a partial return to the gold standard.
Imagine the dump in gold prices would take if any one nation announced a huge amount of gold released onto the market creating a huge and sudden supply.
3.I am not as much an advocate of the gold standard in the sense it existed before 1913, as I am an opponent of the current system.
And I'm not saying our system is perfect, I'm saying a return to gold (or any other commodity backed) standard is dangerous and foolish.