I think you are confusing what is actually varying. I stipulate it is the lack of confidence in the fiat money system not the change in perception of value of gold. In the early 80s , people were confident inflation would continue indefinitely, they gave up lots of paper dollars for an asset they saw not perceived as depreciating. value vs. price. this is a key distinction in my mind. You look at the dollar to determine the price of gold, not the other way around. Gold is a store of value.

If gold prices drop (or rise) 10%, that affects the underlying value of the paper that you hold. When trade restrictions were removed from gold its value increased nearly 500% in the next six years (1968-1974). Gold on the last trading day of 1979 was $512/ounce. The first 14 trading days of 1980 saw a 66% rise in the price of gold to $850/ounce, followed by, in the next 5 trading days, a plummet back to $624/ounce.

There are plenty more examples. The gold price is what fluctuates, while the paper remains the same. Under the post Civil War system, the price of gold was controlled to keep panic selling and hoarding of the paper to a minimum.

Federalized paper money, whether backed by gold or more paper is an abstract representation of value because the government can, and will, manipulate it... or just outlaw owning gold.

In 1933, Executive Order 6102 made it a criminal offense for U.S. citizens to own or trade gold anywhere in the world, with exceptions for some jewelry and collector's coins. Then we had the United States Gold Reserve Act of January 30, 1934 that required all gold and gold certificates held to be surrendered and vested in the sole title of the United States Department of the Treasury.

Gold certificates were again allowed for private investors on April 24, 1964, although the obligation to pay the certificate holder on demand in gold was not honored.

Not until 1975 could Americans, once again, freely own and trade gold.

what is fluctuating gold or the piece of paper? There is no good evidence that the price of gold fluctuates wildly. You say the govt intervenes to stabilize the price of gold, but they are really manipulating the paper.
I do not trust govts to do this under any circumstances. Legal lender should be illegal.

Gold prices traded on the open market do fluctuate wildly and governments, when their currency is backed with gold, do manipulate and control the price to try to minimize those fluctuations.

Any commodity traded on the open market is prone to price fluctuations due to market conditions, speculation, and even weather reports. The amount of the commodity does not change drastically, but prices do.

For example, when a major gold mine announces that it is shutting down for an extended period, the market usually rises on a perceived shortage even though there is no real change in the amount of gold available for trading. In a truthfully gold backed system this would cause an increase in the value of your currency.

I've taken us down this road of discussion for one reason: "Can we trust the federal government with running the monetary system, even if it is supposedly backed by hard currency (gold and silver)?"

that confuses which thing is fluxing. Is it the paper currency or the gold price which is fluctuating?
when a currency is backed by hard asset, it does not flux wildly. ex: the amt of gold in the world does not change wildly, quickly. but the paper can. Gold backed monetary systems are much more honest and stable than fiat. wild flux in prices are the result of govt manipulation in the markets. there is no need for the govt to interfere. it makes thing worse by picking winners and losers. THAT causes panics

the reason they changed the price in 72 was because not ALL dollars were backed, and there was a run on gold by foreign banks.
the first step in de-linking gold from paper, was when Roosevelt outlawed the private ownership of gold and gold clauses in contracts.
In 1792, there were no legal tender laws. so when one talks about the price being "set" by the govt, that did not mean you had to agree to those terms, when not dealing with the govt.

Nobody said anything about livestock... Study the history of currency on the U.S. and you might get a surprise or two.

People have become so ingrained in the federal money system that they cannot imagine the world without one. Again, all you have to do is look at history.

Before the Civil War, there were tons of local currencies that people used in their everyday lives. Most of these were issued by local banks and were gold and silver at specific weights and could easily be used in different locales. They were not a federal currency. There were federal coins, as well, but most people used the local coinage for their business.

When the federal government outlawed all currencies except the federal currency, all control passed to the federal government and out of the hands of the people.

If the local banker was short-weighting his coins, people would find out and not use his bank, but would go to an honest banker. When these currencies were outlawed, the people had no choice but to accept whatever the government was giving them.

"We would also be better off if the federal government left the trading at the consumer level to the business owners and their customers."

That's more than several steps backwards.

I don't have any cows to trade for the gas I need....

Hell no! The problem is in the government's control of the currency.

Every government that has had a backed currency was not much better than the fiat system that we have now because of controls on the price of the backing materials. It is the nature of the beast (federalized monetary system). If the government is going to be in the currency business, it must have stability in the underlying pricing to prevent panics, when prices are low, and hoarding, when prices are high.

We would be better off if governments paid their debts between each other in tangible goods instead of paper. We would also be better off if the federal government left the trading at the consumer level to the business owners and their customers.

The only way to keep the currency from wild fluctuations is to manipulate the price of the gold or whatever is backing it, which is my point.

When the US was on the gold standard, the price of gold was kept artificially low and was not traded openly. In 1968 a two-tiered pricing structure was created to allow the price to freely fluctuate for the first time.

The US Government has only changed its official price of gold 4 times from 1792 to the present. The official US Government price for gold started at $19.75 in 1792. It was raised to $20.67 in 1834, $35 in 1934, $38 in 1972 and finally to $42.22 in 1973.

So even though it was honestly backed (for every dollar in print, there was a dollar in gold in reserve) by something tangible, the standardization of the price of gold (before 1968) was used as a price control to protect against wild swings in the market. Once gold became freely traded, it was no longer possible to back the monetary system with it because you could be in the penthouse in the morning and the outhouse by nightfall.

Government controlled monetary systems in general are fiat in nature, regardless of whether they are backed by something tangible or not. Government monetary systems are just another way to control the citizenry.