That is basically the pro-gold standard/anti-Keynesian response to Krugman's argument, and I'm impressed (albeit saddened) that you could come up with the major, current counterargument so quickly.
I think you understand the story perfectly, and now sympathize with one half of the economics community on the issue of monetary equilibrium.
Incidentally, what would be the market price for co-op credits if people knew in advance that the co-op could arbitrarily decide to flood the market with (face value 1/2 hour) credits? Or of US dollars if people knew in advance that the government could decide, at its whim, to redeem the dollars for less than 1/20 ounce of gold?
There's a disturbing tendency of all the anti-gold standard arguments to assume away the harms of horribly defaulting on a promise made in the generation of a currency. It's just like arguing that a business venture could increase its profitability if it could just repudiate all its loans without penalty. True, but irrelevant.
Why saddened? And what is the other side's standard response to my (apparently well-known) question? I admit I don't know economics at all :-(
Tangential, but a subject of some local interest:
Why Bitcoin will fail by Avery Pennarun. "The sky isn't red." Thesis:
I'm not sure I buy these and am not competent to evaluate his claims on 3., but would like others' critique.
L019: Bitcoin P2P Currency: The Most Dangerous Project We've Ever Seen by Jason Calacanis. A rather more enthusiastic viewpoint of the project:
The actual text contains many more caveats than the eye-catching selection of points above.