Sorry, but this statement is simply wrong. First of all, how much is "enough" gold? Second, tying money supply to a finite commodity would, be definition, limit the creation of money. It would limit bubbles created by excess credit in a manufactured, printed currency, and therefore, limit the crash and deflationary effects of those bubbles.
"Modern Capitalism" (whatever that is) needs credit, but it also needs properly priced credit, stable price levels, and real, free-market interest rates. We have none of those things now. Does the Federal Reserve, pushing rates to 0%, so primary dealer banks can pad their cash reserves and loan money to hedge funds buying up NY and SF real estate count sound credit? The mis-pricing of the cost of money is the most egregious form or wasteful, mistaken, soviet-style central planning there is.
When the gold supply expands at a rate of 1% per year it tends to depress economic activity. It doesn’t not stop recessions or inflation and this is well shown throughout history.
Gold in 1980 was about $300/oz now it is about $1400 after hitting over $17-1800 per. This would mean a massive inflation.
When the price collapsed the shrinking of the money supply would throw an economy into recession.
There has never been a Golden Age without economic perturbations and cannot be. You might recall that the Great Depression occurred when the world was on a Gold/Silver standard. And that fact retarded government action to deal with it.
You did not address the most important problem, it’s impracticability.
The Market establishes credit paper money or no. Your claim that credit is mispriced and interest rates are manipulated for unwarranted reasons. Interest rates on Gold would be very high though I haven’t had time to consider the effect of interest rates of switching to gold.
All your complaints about what we don’t have are unwarranted. Our inflation rate has been stable for at least two decades.