[sten]

(back home now... numbers were off a bit)

total money in the world: $46.5 trillion (link)
total gold in the world: 5.3 billion troy ounces (link)

for the world's money supply to be gold based... gold would have to be:

$46,500,000,000,000 / 5,300,000,000 = $ 8,774 / oz

if the money supply were to be based off a commodity basket where gold was 25-35%, then the value per ounce would be lower.

technically, it's already based on some relationship with the various commodities.. the ratios are just not set

[SSS Two]

You should use M0, not M3 or whatever you're using. That will cut your gold price needed for the gold standard to 1/5 of what you're estimating.

Think of it this way. M3 includes checking accounts, money market accounts and the like. In order for someone to convert currency into gold, he'll have to take the money out of his checking account. When that currency shows up at the central bank and is exchanged for gold, it is taken out of the money supply. Merely withdrawing that cash from the bank reduces M3 by a factor of 5 or so. So please consider the reverse process of money creation you learned about in your Money & Banking class.