>Gold is not an alternative to the financial system.

The modern financial system itself is in fact an alternative to gold

We're going to need some more detail on that argument.

Not sure what OP was specifically referring to, but the argument is true in the sense that pre-1971, gold was money and currency was backed by gold. Now money is whatever the Fed says it is, and currency is backed by faith.

Otherwise known as credit, which has been the prevailing valuation since the Stone Age.

The difference between relying on credit backed by a physical item (gold bricks) versus credit backed by "the Full Faith and Credit" clause of the Constitution is what happens in the event of default by the issuer of the credit. If the wheels stop turning at some point, there is no recoverable asset.

> credit backed by "the Full Faith and Credit" clause of the Constitution

Can you or someone explain why “the full faith and credit clause” of the Constitution is commonly associated with “financial credit”?

The full faith and credit clause has to do with the states generally honoring court judgements, public licenses, etc... from the other States.

What does that have to do with a default by an issuer of credit?

You're confusing macro-economics with micro-economics. There is "no recoverable asset" with currencies and currencies aren't debts that demand payments.

Am I? From 1861-1933 you could redeem paper currency for gold. I agree you can’t do that today, which was the original distinction I was making.

You are. You are conceptualizing currency as debt, as if currencies represented finite deposits of gold which implies the value of the currency. Even with the gold standard, governments still decide the value of the currency.

Doesn't seem like I'm confusing the two. Regardless of how the value was decided, you could still get gold in exchange for paper currency through the Treasury at the fixed rate. You can't do that today, because the money isn't backed by gold.

No it is not