Actually, every other time after the Great Depression (which was arguably different, because there was still the gold standard), markets rebounded quite quickly after a crash; you could say that each crash was a "clean cut", while what we have now is a "botched surgery massacring the patient".
Theories vary. It's believed in some theories that some nations "cheated" and held more gold than the currency offered would imply.
Historically, things are just as unstable with gold as without it. And if you have productivity rises and inadequate increase in gold supplies, you get deflationary effects. This being said, fiat seems just as capable of that.
