You can't MAKE a currency equal... the value theory disallows that. I don't value mexican pesos at all because they are of no use to me.

How do you suggest I otherwise trade my good or service with someone who does not value my good or service but I value his good or service?

The thing is an economist might determine the overall supply of money should be increased to X, but just because they want it that way doesn't mean they can make it happen. It could take months/years/decades to get that gold out of the ground. That's one of the reasons we've got the fiat we do: central bankers and government economists like to be able to make that money supply expand at will to any desirable size.

This reasoning of "oh man, we've got so much economic activity going on right now. We need to print more money" just never made any sense to me. During high economic activity, the money's just changing hands. It's not being destroyed or hoarded.

Can you paint a scenario for me where the supply of money is insufficient to keep up with the activity?

In my view, a 'high' supply of money simply makes money less valuable and prices go up to adjust. Conversely, a 'low' supply of money simply makes money more valuable and prices go down to adjust. Until/unless you get down to the point where your smallest unit of currency won't buy the smallest thing available to purchase, or unless you've got a population/money ratio so out of whack that there's not enough money for everyone to have one unit of it, I don't see a problem. Prices just keep adjusting downward, and what's wrong with that?

Enjoying the conversation!
It is the "overall supply" that I am discussing. So - say there was an economy with a 100% gold-backed currency and the Austrian economists determine that the overall supply of money must be increased to keep pace with economic activity.
How do they do it?

Hmm - we might be operating on different definitions of "supply of money".
I would call the interest rate the "cost of money".
Now, I can see your angle if in your view a bank has a storehouse of money sitting in its vault not doing anything, and a lowering of the interest rate creates a desire for someone to borrow that money, thereby increasing the "supply" that is now circulating in the economy. But that's an entirely different matter than supply being the "creation of new money". Do I understand or misunderstand you? I would say in our fiat system that it's a bit flipped around from your statement. The supply of money is controlling the interest rate. QE has sent interest rates to the floor.

I said very few do. There is an economic benefit to china and others that do. It keeps their currency lower values against some particular currency. This is generally used to keep the cost of their goods and services lowered than their competitions.

The Austrian definition of sound money has nothing to do with managing the supply of money based on measurements of economic activity.
See also: http://mises.org/daily/2623
Particularly, the section "The impossibility of a stable purchasing power of money"
Further quote from section "The Call for Free-market Money":
"It might sound paradoxical to most mainstream economists, but to Austrians it is the very objective of price stability that contributes strongly to making a dismal prediction. The "index regime" provokes repeated government intervention and misalignments, which, sooner or later, result in serious economic and societal crises."

they are still working on that. They exchange readily into currency. More and more companies are accepting them. People are coming up with amazing ideas-like a vending machine that takes your bitcoin and exchanges it for currency and vice versa. Bit coin is sold through different exchanges and the price varies slightly depending. You can also buy fractions of a coin. Check out Coinbase, an online wallet that will also act as a broker for you.

We're not on the same page.

Were STV the explanation about why fiat currencies "work", there would be no need for legal tender laws. I argue people only "value" fiat currencies because of legal tender laws which force their acceptance. No true individual value judgements are being made, and these are the foundation of STV.

Referring to Mises' Theory of Money and Credit, Chapter 8:
http://mises.org/books/Theory_Money_Cred...
In Chapter 8 part 4, Mises points out how economists have tried to make the case that STV applies to money as well as goods/services, but have come up short. You make statements in your post how STV suggests the value of "a good or currency". My reading of Mises as well as the Wiki on STV suggests you ought not be mingling money with goods and services.

Chapter 2 of that link make the argument that whatever money is...it has a REAL value. To say "currency backed by something goes against the very basics of Austrian Economics", well, explain that further, please. The Austrian explanation of money boils down to the "Regression Theorem" http://mises.org/daily/1333
When Austrian School economist Hayek suggested competing private fiat currencies could work, he was ridiculed for it. https://mises.org/daily/1854
Austrians are for sound money. That means in practical terms a currency that is tied to sound money.
You wouldn't see so much ridicule about Fiat money and so much stress on Gold from the Austrian crowd if what you're saying is really true.

it's an issue with the $.
1. store of value 2. store of value 3. easily divisible 4. easily transferable 5. widely accepted In this case, NOT backed and regulated by the govt is a good thing

Interesting point of view. Of course, $5Au has a certain, ahem, bias when it comes to currency.