The depreciation of money’s value isn’t caused by gold.  It’s driven by fiat currency and the relentless use of the printing press.  Gold has a fixed supply; it cannot be conjured out of thin air—that’s its enduring beauty.  As the quantity of paper dollars increases, prices will eventually rise.  Inflation isn’t simply a rise in the general price level.  True inflation is the unchecked expansion of the money supply.  Price increases are merely the visible consequence.  What changes fundamentally is the subjective value of each paper dollar.

Economic crises, or the “business cycle,” are not the products of a free market gone awry.  Karl Marx and his ideological descendants argued that such cycles were intrinsic to capitalism, but they overlooked a crucial factor: the role of central banking.  Marx observed these recurring crises and wrongly attributed them to the natural functioning of free markets.  What he failed to recognize was the disruptive influence of credit expansion orchestrated by central banks.  Was this oversight deliberate?  Expanding credit is not synonymous with economic growth.  Yet, it can temporarily spur the economy and give the illusion of prosperity—often just in time for the next election cycle.

Over time, centralized control erodes the value of money and, by extension, undermines private property rights.  Money is supposed to be a transmitter of value.  It loses this function when its supply is constantly increased.  Each new dollar dilutes the value of those already in existence.  The state, once it seizes control of the money supply, can’t resist the temptation to print more.  With each printing, the value of money diminishes further, and the consequences ripple throughout the entire economy.

In an ideal system, money should be directly convertible into a tangible commodity.  Your dollar should be exchangeable for something real—something of intrinsic value.  The paper currency we use today isn’t backed by any commodity.  It’s a liability of the central bank, a debt owed by society.  To cover this debt, more and more dollars will have to be extracted from you to pay back the interest.  Under this framework, repayment is structurally impossible.  The debt can never be fully extinguished because new money must be created to service the old debt, leading to an ever-worsening spiral.

Printing money doesn’t create wealth—it distorts the very measure of value.  Goods can’t be printed into existence.  As more money floods into circulation, the prices of goods inevitably begin to climb.  Politicians and central bankers, in a foolish attempt to “stimulate” the economy, resort to expanding credit.  This only pushes money into areas where it isn’t demanded, creating artificial booms that eventually lead to painful busts.  These actions violently disrupt the value of money and the economy at large.  For any asset to function effectively as money, it must retain stable value.  Fiat currency, subject to the whims of central banks, can never provide that stability.

The market—not the state—should determine what serves as money.  When left alone, the market gravitates toward commodities with intrinsic value, like gold or silver, as money.  Fiat currency, backed by nothing but promises, undermines the entire economic system.  As long as governments can print at will, the value of money will continue to deteriorate, and with it, the very fabric of society’s economic stability.  Only a return to sound money principles can restore the integrity of value and preserve private property rights in the long run.