So if some bank takes in 100 oz of silver and issues 100 IOU’s, each redeemable at all times for 1 oz. of silver, then that silver backing has no influence on the IOU’s value? I suppose you’d say backing is even less relevant if the bank swapped some of its silver for land or mortgages, or if the bank suspended convertibility into silver, while still redeeming each IOU for 1 oz. worth of land.

The value of land, whether expressed in £, $ ounces of silver or whatever, is based upon the discounted net present value of its rental value, which is certainly not mystical, but very real, and consists of the use value of the location, and the capital invested in it.

in fact, maybe two thirds of money in existence was created as interest-bearing loans secured by mortgages, and is therefore deficit-based but land-backed.

Where Law went wrong was that the use value of the Mississippi Company land against which his Banque Royale lent money to speculators to buy the shares, thereby creating the Mississippi Bubble – turned out to be pretty much worthless, at least at the time.

It’s ironic to think that had he not done that, around one third of the US (the territory went clear to the Canadian border) might still be French.

If the central bank owns land worth 1000 oz. of silver, and it issues 1000 paper currency units, each redeemable for 1 oz. of land, then there is nothing mystical about the fact that each currency unit will be worth 1 ounce.

If that central bank then proceeds to throw away its land and print new money to spend on fast living, as Law did, then there is also nothing mystical about the resulting inflation.