I am not familiar with Huerta de Soto's work, but full reserve backing has nothing to do with the gold standard or hard money delusions (despite the fact that austrian economists are strong proponents of both ideas). The idea behind full reserve banking is to prevent private money creation, which is inherently unstable. During a boom, private lenders will increase the money supply, and during recessions they contract it. Full reserve backing would seriously reduce this instability.
Also, a recession (or even depression) after implementing full reserve banking need not be true.
See the recent IMF paper on the so called Chicago Plan.
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