I'm not so sure my thinking is wrong. I never implied that traders run the economy. Traders trade around economic news.
My thinking was that the oil shocks of the 1970s exposed the flaw in gold backed dollars. If dollars=gold and oil rises in value against the dollar, then those controlling oil get control of gold and hence the dollar. Control of the dollar leads to control of the US economy. Solution: decouple gold from dollar.
Sorry but I don't see removing gold from indexing the dollar to be a big deal. The dollar is what people will pay for it on the currency market, not what they will pay for gold, a nearly useless commodity.
Wrong again. Dollars were not backed by gold during the oils shocks of the 70s. Nixon removed gold backing in 1971. In fact this removal contributed to the oil shocks as the markets knew that there were too many dollars floating around.