The state has found a way to grow its power and wealth without limit, all while hiding its actions in plain sight.  Under a gold standard, their ability to take was constrained—gold had to be physically extracted from you.  This direct theft was visible, and therefore more likely to provoke resistance.  Paper money changed everything.  Now, wealth can be siphoned from your hands invisibly.  The state no longer needs to raid your paycheck openly.  It does so through a hidden mechanism.  You might not see the numbers vanish, but you’ll feel the consequences.

Inflation is often misunderstood.  It’s not simply rising prices—that’s just a symptom.  Inflation is the expansion of the money supply.  When new money is created, it doesn’t fall from the sky.  It’s distributed unevenly, favoring those who receive it first.  These beneficiaries—banks, corporations, and government programs—get to spend it before prices rise.  By the time the new money trickles down to you, the damage is done.  Prices are up, your savings are worth less, and you’ve unknowingly paid a hidden tax.  Inflation is nothing more than a redistribution scheme dressed in economic jargon.

This system isn’t a bug; it’s the feature that fuels state power.  Taxes have natural limits—they are visible, and resistance to overt taxation grows.  Inflation, by contrast, operates in the shadows.  Under a gold standard, the state was constrained.  Gold couldn’t be printed, and acquiring it required production, trade, or theft.  Paper money removed these barriers.  Now, whenever the state wants to fund its wars, expand its bureaucracy, or bail out its cronies, it simply prints the money.  Gold imposes discipline, paper money enables recklessness.

The central bank is the linchpin of this scheme.  It’s neither a market institution nor a genuinely independent entity.  It’s a creature of the state, designed to serve its interests.  The illusion of independence is a clever ruse to mask its true purpose: financing the government’s ambitions.  Without the central bank, the state’s capacity for power grabs would be sharply curtailed.  The central bank’s defenders insist it operates above politics, but every move it makes serves the political class.

By replacing gold with paper and granting themselves the exclusive right to counterfeit, the state has pulled off the silent theft of your wealth.  The central bank is their enabler, their accomplice in this grand larceny.  Together, they have orchestrated the greatest swindle in history—one that continues every day, unseen by most, but felt by all.

Reference

Murray Rothbard; Economic Controversies