As we wait this morning to see if gold keeps slipping, I’ll note that Tennessee is the latest state to join the growing “sound money” ranks. In a nutshell, sound money is a concept where whatever is used for money should have constant value, and not be open to the direct machinations of politicians. All government-issued money these days is fiat currency, the opposite of sound money in the opinions of many. Even though they don’t like to say it, economists define fiat currency as “money backed by faith,” whereas sound money is money backed by something with real value.
So you can get a mix, a proportion of floating currency might be backed, for example. In the past, the US Dollar was redeemable for gold, which made those respective dollars sound money. When the US came off the gold standard, the Dollar became a true fiat currency. Way back in 2017, your Gold Enthusiast commented on Arizona’s efforts toward sound money.