What Peter Schiff is suggesting is issuance of digital currency backed by gold. It is not very well know feature, but Bitcoin is actually capable of handling backing of currency with anything you like. It's called 'colored coins' and it is kind of a currency within currency. You take some satoshis and store them in a specific wallet. Then you announce your commitment to back each satoshi in that wallet by e.g. 1 ounce of gold. Then you can sell your satoshis from that wallet for whatever price unrelated to the price of 1 Bitcoin - most likely you'll be offering a price close to the price of 1 ounce of gold :-). Of course you then need to keep your promise in case somebody comes with your satoshis claiming his gold. People will most likely choose trusted parties for this type of transactions...
This is amazing concept which will make Bitcoin's utility even greater.
