The law of supply and demand is not to be conned. As the supply of money
(of claims) increases relative to the supply of tangible assets in the economy,
prices must eventually rise. Thus the earnings saved by the productive members
of the society lose value in terms of goods. When the economy’s books are
finally balanced, one finds that this loss in value represents the goods
purchased by the government for welfare or other purposes with the money
proceeds of the government bonds financed by bank credit expansion.
In the absence of the gold standard, there is no way to protect savings from
confiscation through inflation. There is no safe store of value. If there
were, the government would have to make its holding illegal, as was done in the
case of gold.