if the banks have all the gold that would mean they would lend it out to us. if you lend money out at interest that means everyone will be in debt to the banks. we make money, pay them back the debt and then borrow again.
How would a transition look like?
The person who has all the gold will be in an advantageous psoition.
It seems you may be thinking of previous gold systems like Bretton Woods or some kind of government-manipulated gold standard. If we were to go to a true free money system, banks would not own all the gold. Wealth would be spread across society in similar manner as it is today.
Let me give an example of how such a system might work from an individual standpoint:
I have 10 ounces of gold. I choose to deposit 5 ounces at Bank A, lend 4 ounces to Investment Company B and I keep one ounce in a safe at my home. Bank A charges a small fee for the safekeeping of my gold, but this a true demand deposit. They may not re-lend that money like they do in today’s fractional reserve system. Investment Company B promises X% yield per year, but I may not recover that money for a period of 5 years without incurring a penalty. In this scenario I am not in debt to either Bank A or Investment Company B, though both of them have some of my gold for either safekeeping or investment.
I imagine day-to-day transactions would be very similar to the way they are now from the standpoint of the individual. The biggest difference is that you wouldn’t use Federal Reserve Notes as paper currency, but would likely use bank-issued notes instead. These notes would be backed up physically by the gold you have stored at Bank A. If Bank A’s reputation is good, their notes would likely be widely-accepted. Clearing houses would likely exist to facilitate inter-bank gold exchanges and ensure that banks are not inflating their currency. Of course, credit cards and debit cards would still be widely used for transactions.
It would be practically impossible for one person to have all the gold in the world. Even if they did, do you think people would stop trading with one another? Surely not, instead they would simply use another money.
On way to do it is to repeal all the taxes and laws that prevent people from using gold and silver.
The point is not that there should be a law forcing people to use X as money. People should be free to use whatever they want as money.
As a practical matter, reform is not going to happen. There are too many people who profit from the current corrupt system. They can always profitably lobby to block reform.
If you have the perk of printing and spending trillions of dollars a year, it isn’t hard to set aside a couple billion to lobby/bribe Congressmen.
Complete economic collapse is much more likely than reform.