There seems to be some misperceptions about the gold standard, so I'm going to try to talk about the good and bad of it, and maybe explain why we will never never ever go back to it, ever, never ever. Maybe after a nuclear war or captain trips, but I would be surprised if it was before that.
The gold standard in this country was begun in 1900, with the Gold Standard Act. Before that we used a bimetallic system, but it was basically a gold standard as little silver was traded.
This only lasted until 1933, when Roosevelt outlawed private gold ownership. After WWII, the Bretton Woods system was put in place - it set a fixed global exchange rate for gold, I think at $35 an ounce.
That ended in 1971, when Nixon ended it, and since then there have been no formal links between currencies and any commodity.
A gold standard, at its heart, prevents a rapid increase in the money supply, and the inflation associated with it. If the government prints a bunch of bills, there will be more supply than demand for money, and people will eventually start turning it in for gold until the treasury has none left.
The problem here is that there is more than one factor that causes inflation. There are 4:
Supply of money increases
Supply of goods decreases
Demand for money decreases
Demand for goods increases
I'll just quote a real economist here, stolen from about.com:
Economist Michael D. Bordo explains:
"Because economies under the gold standard were so vulnerable to real and monetary shocks, prices were highly unstable in the short run. A measure of short-term price instability is the coefficient of variation, which is the ratio of the standard deviation of annual percentage changes in the price level to the average annual percentage change. The higher the coefficient of variation, the greater the short-term instability. For the United States between 1879 and 1913, the coefficient was 17.0, which is quite high. Between 1946 and 1990 it was only 0.8.
Basically, economies of the world were way more unstable under the gold standard, as governments and central banks had control over absolutely nothing. The gold standard prevents long term inflation, and does nothing else. It does not allow for changes in exchange rates between countries due to relative economic changes, it does not allow for any central control of the money supply (other than maybe through alchemy). The only argument for a Gold Standard seems to come from fear that the government or central bank in charge can't be trusted to keep inflation low. If you don't trust them to keep inflation low, why do you trust them to stay on the gold standard even if they went back?