the US currency in this depression would become suddenly over valued, which it probably has been for a long time anyway because it is linked well to oil. Oil is actually needed by everybody and so everybody needs $ to buy oil which has uplifted the US currency for many decades.
I see this argument very often. It is wrong.
Global currency markets are very, very liquid. The value of the dollar comes from people wanting to hold dollars, not spend them. Most oil bourses are priced in dollars, and settlement usually happens in dollars, but that doesn't increase net demand for dollars. If the buyer doesn't have dollars, they sell whatever they have into Forex to get dollars, and if the seller doesn't want to hold dollars, they turn around and sell the dollars into Forex. The net effect is zero. If the buyer already had dollars, or if the seller wants to hold them, that represents a net change in the desire to hold dollars, which is independent of the oil transaction.
my point is, if 1$ = x . gramms of gold.
then as 'investors' park money in gold, then a currency backed in gold would appreciate in value, since holding $'s would gain value against none gold backed currencies.
At precisely the time when the US required devaluation to correct for the over valued $, it would surge in value