A medium of exchange must emerge through voluntary market interaction.  Historically, people selected what worked best.  No decree birthed money—it evolved.  Gold, silver, and copper weren’t assigned value, they earned it.  Among them, gold rose to prominence, not by coercion, but by performance.

Enter fiat currency.  It isn’t chosen—it’s imposed.  It’s not backed by anything real, just by trust in a political institution.  That trust is often blind.  Unlike gold, which limits rulers, fiat empowers them.  It breaks the natural limits of spending, saving, and accountability.  The state no longer needs to tax or borrow honestly.  It simply prints.

People assume money must come from government.  That idea is both new and dangerous.  Fiat currency is a tool of control.  It’s praised for “flexibility,” but that just means it can be manipulated.  That’s the point.  Inflation is no accident,. it’s a design.  It benefits the early receivers of new money—banks, governments, and politically connected firms.  Everyone else pays later, through rising prices and diluted purchasing power.

Gold restricts this scheme.  It can’t be created with a keystroke.  Its supply grows slowly and predictably.  It disciplines credit markets.  Under a true gold standard, the state must live within its means.  That’s intolerable to politicians and pressure groups who demand handouts without production.  So, they abandon gold, call it obsolete, and attack anyone who defends it.

Fiat allows for war without taxes, bailouts without savings, and promises without production.  It disconnects cause and effect.  The bill gets passed silently through inflation, not openly through taxation.  Most people don’t even realize they’ve paid.  Their wealth just vanishes.

Sound money requires effort.  It isn’t conjured—it’s mined, refined, earned.  Fiat is lazy.  It’s dishonest.  It hides risk, distorts prices, and feeds bubbles.  The boom-and-bust cycle isn’t a market flaw.  It’s the result of artificial credit.  A paper system encourages illusion.  A gold standard enforces reality.

The argument isn’t just economic—it’s moral.  Fiat robs savers, rewards borrowers, and punishes prudence.  It flips incentives upside down.  It’s not neutral.  It transfers wealth upward and hides responsibility downward.  It’s the silent partner of statism.

Paper money is the state’s favorite tool.  Gold is its natural enemy.  Which side you favor says everything about how you view power, truth, and freedom.

References

Ludwig von Mises; Human Action

Murray Rothbard; Man, Economy, and State