Why bother to keep price fixed to 1000 USD per ounce, if value of gold itself will afloat anyway, thus making entire thing pointless... That system would have point if value of gold was constant. It *could* have point if it wasnt tied to gold, but to basket of goods - it would be simple inflation/deflation countermeasure then.
During the classical gold standard, gold was the standard. It was the money of the US Constitution. So it was a goal for bankers to keep their private currency in parity with gold. As soon as it wasn't, their currencies failed. This was because gold was the standard. And if they couldn't live up to that standard, no one would accept what they were calling money.
Banks would buy gold in order to keep their currency strong.
They would also create debt money, which would pay them interest. This was the period of "free banking".
http://en.wikipedia.org/wiki/Free_bankingIn many ways, Bitcoin is a system of free banking, which was the banking system credited with the most stable and productive trading environment in the last few centuries. Bitcoin goes a few steps further though. It is built on the foundation of internet peer-to-peer resiliency.