That said, if the US were in a better financial situation, how would 1-2% inflation (as far as I can tell, this roughly the rate that gold is currently being extracted) lead to people starving in the US?
Obviously, reality is much more complicated, but I just want to understand the reasoning. Assume 0% inflation if you prefer.
2% is a healthy level, which is why it's the Fed's target.
The problem is that pegging a currency to gold does not peg inflation. Inflation will still move around based on other economic factors. You will have just eliminated your best tool for influencing it.
If you needed to adjust a currency pegged to gold, you'd have to get more people working in the mines. Which is either not possible, or a human rights violation.
That said, if the US were in a better financial situation, how would 1-2% inflation (as far as I can tell, this roughly the rate that gold is currently being extracted) lead to people starving in the US?
Obviously, reality is much more complicated, but I just want to understand the reasoning. Assume 0% inflation if you prefer.