Maybe Friedman is an idiot, but he is right, IMTO, that price stability occurs when money aggregates match growth in GDP (or GWP), and if Friedman is not an idiot, then tying such money to gold will force extraction of lesser and lesser ores and thus inflation, quite simple. That is what I have been terming the "Sodom bed" of gold backing of currencies.
Friedman thought basically the same thing, not a "Sodom bed" but a "Procrustan bed" (Procustus was the guy who kidnapped people, laid them on his bed and made everyone fit the bed by cutting off any excess or stretching them).
His solution--a neat one, IMO--was to eliminate the Fed's power to tinker with the money supply, and mandate that the money supply increase by a steady 2% (or whatever percent of growth was deemed reasonable for that economy), come hell or high water. This would smooth out the cycles and provide predictability for CEOs and finance guys.
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