I agree that 1/8000 of an ounce of gold is not a practical measure - yes, it could be done, but think about the cost of making it into thin strips and embedding it in money: its just not practical.
Here’s what you do: Declare that gold is now valued at $8,000 per ounce and silver at $500/oz. (restoring the old 16:1 ratio). That backs the currency and stops the chaos of the moment, thereby allowing the economy to begin to recover by restoring confidence. Concurrently, you announce that at a date certain, say 3 or 6 months later, ALL current US currency and coinage will cease to be currency (though they will likely be collectible), but that they can be turned in for [name of new currency] at a ratio of 1:387. Effectively, you will have a gold- and silver-backed currency with the gold in it valued at $20.67/oz. and the silver at $1.29/oz. (exactly where they were before FDR seized the gold in 1933). Additionally, all bank, brokerage and other financial balances (including our debts) will be adjusted in the same manner. Finally, ALL contracts will be modified to reflect the change in currency (and people will automatically have the right to state future contracts in terms of ounces of gold or silver).
As an aside, all new currency and coinage would be barred from having the image of any person born after 1800 on it to remove politics from that area - use Founding Fathers or a generic Lady Liberty as was done for much of our history, and go back to changing the coinage every 25 years to keep collecting a vibrant hobby that would earn lots of seignorage for the government as older coins were removed from circulation and replaced with newer ones.
There would be an end to speculation in gold and silver, as they’ll have a stable value in terms of the new currency...and there would necessarily have to be an end to taxes on any gains on the sale of gold or silver. Gold and silver will be money, and you couldn’t be taxed on the exchange of them for cash or each other any more than you can currently be taxed for exchanging a $10 bill for 2 $5 bills.
What does all of this do? Well, it backs your currency with gold and silver, just as the Founders wanted. Second, it restores practicality to the use of the physical currency - silver can be used for smaller transactions, and we can once again have gold coins. Ironically, all of the old “junk silver” coinage and the common date gold coins from yesteryear could once again be used as circulating coinage (though I think it likely that most would still stay in closets and vaults as collectibles). Initially, since this would necessarily be done after a currency/financial crisis, people will hoard the new coins - but eventually it will become inconvenient and people will revert to using paper bills, cards and electronic transactions (just like now), with the only difference being that we’ll have a stable currency and (necessarily) limited power for government.
Yes, I know, doing a “reverse split” on the dollar would look Turd World. But face facts, we ARE Turd World when it comes to our finances. Going to a gold/silver standard would restore fiscal sanity, and it is completely practical.
Declare that gold is now valued at $8,000 per ounce and silver at $500/oz. (restoring the old 16:1 ratio).
The actual market ratio is now a bit over 40. So if your plan were implemented, I’d buy silver elsewhere, trade it in for gold, sell the gold elsewhere for (cheap) silver and more than double my money with each cycle. The equivalent happened in the early 70s, which is why Nixon closed the gold window (folks were pulling out gold, and trading for cheap dollars overseas - lather, rinse, repeat.