I agree with you that the move by Nixon on gold was a poor decision. ( but I think you mean even earlier than that) That said, I think if we were still on a gold standard completely, it would really constrain the growth of the economy.
On the other hand, at least private enterprise would not be competing with government for capital.
Where would markets be without central banks ? Realistically, I think we'd be about 30% lower on the indexes than right now. But there is another side to that question. Without central banking there would likely be a lot more unpredictability about the cost of capital. I think that would affect the markets to an even greater degree than the recent easy money policies.
The whole argument about interest rates has moved from the realm of economics to the realm of politics, IMO. If we accept that the rate of inflation is currently 7%, then the 10 year treasury should be yielding 3.5-4%. But it is now around 1.8%
Every 1 % rise in rates increases the federal government's interest costs by 290 billion dollars per year. So if the ten year yield climbs to 3.5-4 % that means interest costs will be around 580 billion per year.
The bond market is telling us that there is no way the Fed will go that high. I agree they won't. Interest costs alone would eat up much of the annual budget, leaving nothing to spend on transfer payments. That won't happen. If it does happen we will be looking at a recession and the Fed will be again dropping rates just like they did in 2018.
A catastrophic event is possible and chances probably get greater as time passes. Here's one that is possible though pretty low probability IMO.
We see Biden stacking the Fed board of governors with easy money, climate change, anti-business activists. The game plan is to use the Fed to attack the banks and the oil companies. How will that lower prices ? We know just the opposite will happen. We may as well put Lizzy Warren and Bernie Sanders in charge of everything.
But consider the disruption it would cause if Biden resigned after the two year point of his residency. No one in his right mind wants Harris. This may not be the "big one" but it sure will roil the capital markets world wide.
Personally. I think inflation will decline not because of Fed intervention but slowly as the supply chain works out the kinks. I suspect by this time next year we will still be looking at 3-4% inflation and a yield on the ten year treasury at 2.5 MAX. I know you see that at that point we still have a negative real interest rate.
If that is true, then I don't see Armageddon in the markets because money will still be 'cheap'.
Whatever way this plays out, it is going to be a volatile and choppy time in the markets, IMO.
As an after thought.......I am more worried about this push by Yellen to impose the 15% worldwide tax on all business everywhere. Just another attempt to make it more difficult to avoid government confiscation of private assets, IMO, and a closer step to world government. And, of course, the biggest targets are all US corporations..................even Ford