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Date Posted: 13:20:24 1/24/23 Tue
Author: Jasper
Subject: Todays Charles Smith

.
Many proclaim a desire for "sound money," but "backed by X" currencies are not "sound money" unless they can be converted directly into X. Those proposing gold-backed currencies are trying to secure the promise of "sound money" without actually doing the hard part, which is convertibility to the underlying asset.

The only way a currency can be "as good as gold" is if it can be converted to gold. Without a conversion mechanism, the currency isn't backed by anything but an illusory connection between reserves and the currency being issued.

The only way an oil-backed currency is actually backed by oil is if the currency can be converted into an oil futures contract, i.e. a claim on actual oil. This is what made America's "gold standard" an actual gold-backed currency: other nations could (and did) demand gold in exchange for their surplus dollars.

https://www.oftwominds.com/blog.html#jump

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