When the U.S. abandoned the gold standard in 1971, one would have expected the value of a dollar to plummet to zero, since there was no longer anything backing its value and no reason to believe that its value could be maintained. Instead, the dollar kept most of its value and remains the world's reserve currency due to the power of the status quo.
And the US (as well as the rest of the world) suffered some of the most serious economic problems of the 20th century for the subsequent 8-9 years. US interest rates peaked in the 20% range in 1980.
And you're also exhibiting the "worthless paper" fallacy. Gold's price is massively inflated as a consequence of the demand that exists to use it as money. This happens with anything you use as money, whether it has any intrinsic value or not. It just so happens that in the long, long history of using physical objects as value tokens, gold bullion is intrinsically good as a monetary substance because of it's physical properties, but those properties only confer that kind of value in that monetary context. Essentially, gold as money is worth alot more than gold as jewelry, or gold as an electrical conductor. You can tell that this "overpriced for physical use" still exists today by plain observation: alot of very useful applications of gold are overlooked, because "it's too expensive for that".
So the paper is OK, as long as it can be forced or perceived to share the properties of gold (indeed, the rhetoric for selling paper money was "good as gold"). In practice, money printers do not have the self control required to make it so. But that doesn't mean they can't make it work for a relatively short period of time, that being the same short period in which we've mostly lived our lives.
