"To fully support a gold peg for the ruble, those 2298.53 metric tons of gold must be adequate to account for every ruble within the money supply"
Has any country's currency ever been "fully supported" in that manner? I.e. has any country's central bank or treasury ever had enough gold to redeem every unit of physically printed currency, much less any of the broader measures of "money supply"?
It seems to me that currency ostensibly backed by PMs has always been a confidence game. It doesn't require full backing. It just requires enough to withstand "runs". As long as the small number of people who show up at the window can successfully redeem their paper for specie, and confidence remains, most of them won't.
"To fully support a gold peg for the ruble, those 2298.53 metric tons of gold must be adequate to account for every ruble within the money supply"
Has any country's currency ever been "fully supported" in that manner? I.e. has any country's central bank or treasury ever had enough gold to redeem every unit of physically printed currency, much less any of the broader measures of "money supply"?
It seems to me that currency ostensibly backed by PMs has always been a confidence game. It doesn't require full backing. It just requires enough to withstand "runs". As long as the small number of people who show up at the window can successfully redeem their paper for specie, and confidence remains, most of them won't.