This was a very interesting account, but I think it misconstrues Morgan's point and does not refute it. The difference between "gold' and "everything else" is that gold is "specie" a finished product of mining and refining, whereas everything else is a promise. Gold is uniquely suited to be used as money because of certain attributes it has that other products don't have. It won a Darwinian competition among all other products to BE money. Those occupying armies could have use lead or peanut butter, but they didn't, because gold by its nature was a better choice, not because those other things were what Morgan called "credit."

The standard MMT explanation of fiat money tracks the gold story in this article: the government imposes taxes payable in its currency, and the locals must provide stuff to the government to get the currency to pay the taxes. In this article, that money is gold, but if the invaders had demanded payment in central bank reserves, then central bank reserves would have been money. The information technology didn't exist to make central bank reserves usable as money back then. But the chartalist principle of tax-driven currency adoption applies to gold and paper equally.

Technological limits on authentication and underwriting made specie "money" and "everything else" merely "credit." But JPM dealt in credit; he was a banker. Perhaps he was making the point that specie was not subject to underwriting error, the cause of the financial panics that he was continually being called upon to resolve, until he and his friends went to Jekyll Island and invented the Fed.

Not using credit as money leaves to much production unproduced and unconsumed. The net result of booms and busts is better than the net result of not using credit as money. I'm sure JP knew that. He was just making a point that there is a difference between something that has already been produced and something that is traded before it comes to be.