This shifts wealth to those people who hold cash, a non-productive asset.
This increase real interest rates, deterring investments in productive assets.
I followed your line of reasoning until that last line. If you assume this cash is held in a bank, then these dollars are still lendable (even multiple times over, if you assume we haven't also done away with fractional reserve, along with this presumed return to a gold standard.) Or, are you assuming that these wealthy people are squirreling all their gold-backed currency away under their mattresses?
There are 10 kinds of people in the world. Those who understand binary and those who don't.
That joke ceased being funny, 10 years ago...
The next person to mention spaghetti stacks to me is going to have his head knocked off. -- Bill Conrad