Inflation is Theft

in #money6 years ago (edited)


I first heard of inflation when I was 16, and at the time, I obviously, did not really understand what inflation really meant. What I gathered when the grownups explained what inflation was to me, was in essence, the depreciating value of money that happens consistently.

It never occurred to me why that was the case, but all the adults seem to be quite comfortable with the fact that inflation was simply a thing that happened. So naturally, I presumed inflation to be absolutely normal as well.

Well if a 16 year old were to ask me what inflation was today, I would definitely not tell him or her that inflation is okay or normal by any stretch of the imagination.

So what exactly is ‘Inflation’?

Though inflation may seem like a complicated process, which it may be. Fundamentally, inflation is quite simple.

It's the process of the government printing money.

The government then spends this additionally printed money, which increases the supply of money in circulation, while every other metric of the economy stays the same. No more goods or services have increased in value, the economy has not gained anything new, aside for more money in circulation.

As such, the value of the currency with the additional currency added to the pool, depreciates in value.

Think of it in a simpler sense.

If you have a cup of coffee, and you add more water to the coffee, you don’t actually have more coffee, rather, just more diluted coffee.

If you ordered a large coffee from Starbucks, and the barista, gave you a medium sized coffee.

When you inform the barista the coffee is of the wrong size, the barista then proceeds to pour your coffee into a bigger cup and add water into it and charge you for a large cup of coffee.

How do you feel about that? You should feel a similar way about inflation, because it literally is.


Year on year, currency is being devalued through no fault of yours or even the better good of the economy. It is value that is simply being slowly, yet surely siphoned away.

History may teach us something about inflation

Denarius, the Roman currency implemented by Julius Caesar, in Ancient Rome, was initially minted and distributed as a 100% Silver coin.


However, every time the Empire found itself in a dire strait, it would mint more Denarius coins, each time, with less and less silver.


In a span of 150 years, the pure silver coin would end up becoming only 0.2% silver as a outer coating with bronze as the base.

It would eventually be so worthless that the use of Denarius as a currency eventually halted and barter trade had to be reintroduced.


Emperors were given the option of callously overspend as it would be as simply as inflating the currency once again .
The debasing of the currency seen by economists today as the defining factor that led to the fall of the The Great Roman Empire.


Just because inflation has been normalized, does not make it right by any means.

From Steve Saville – an astute economist:
“Regardless of whether it is implemented via an emperor surreptitiously reducing the precious-metal content of the coinage or by the banking system (the central bank and the commercial banks) creating new currency deposits out of nothing, monetary inflation is a method of forcibly transferring wealth from the rest of the economy to the first users of the new or debased money. In other words, it is a form of theft.”

How is inflation theft?

Going back to the Starbucks analogy, the reason you would not be happy with the barista for simply adding water into your coffee, was because, the barista did not add any value to your cup, rather just made the cup full with additional water which is virtually valueless.

If you use a counterfeit note to make a purchase, by all definitions, you are stealing.

Why? Because you did not provide any value or service to attain that currency. You tricked the receiver into believing it is of value, when in actuality it was not.

In the same way, when a government spends money of which it generated without any consensus, without providing any goods or services, it is essentially creating money out of thin air and spending it.

The definition of theft does not change by simply by doing it on a massive scale.

Secondly, when the money is spent by the government, it is spent at full value before the effects of its addition affects the economy. The cost of its expenditure is then absorbed by the real economy, when the money is spent and it weakens the value of the currency.

As such, selling you water at the price of coffee, by diluting your coffee.

Things are somehow even worse now

Inflation was possible even with precious metals. It is made even easier with paper currency. Fiat dollars, which are not backed by any commodity is absolutely ripe for exploitation through the means of inflation as unlike the case of the Denarius, paper dollars are much easier to produce and even harder to account for.

As if, literally printing money isn’t bad enough, It is now made even easier as newly generated money, now does not even have to be printed. It can simply be injected into the economy on a digital ledger, which means, stealing money from it’s citizens has become as streamlined as simply making a executive decision that it is time to do so, and changing some numbers on a digital ledger.

Historically fiat currencies have been inflated into worthlessness as they have been devalued toward their intrinsic value of zero. This has been clear for three centuries, but the theft remains successful so “printing currencies” and inflation of the currency in circulation are still used aggressively.

The Excuse for Inflation

Inflation Gives Flexibility To The Government To Save Its Economy In Times Of Stress

People often presume that governments ‘Fire up the printing press’ as its called, during times of stress for an economy, like during a depression or recession and especially during war, as a means to ensure the safety, stability and overall well-being of the nation.

Though that would be inflation’s strongest point, in my opinion, it is not a good enough reason.

That is the equivalent logic to saying that Starbucks should hold the right to add more water into your coffee because Starbucks’ profits earnings were very low and close to bankruptcy, as such, you deserve less coffee for the same price.

This is before the fact that, the rate of inflation is consistent, even during times of peace and of economic growth which basically renders this argument invalid anyway.


Alan Greenspan before joining The Federal Reserve

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.

Alan Greenspan, Gold and Economic Freedom, 1966

that was the Alan Greenspan of the mid-1960s. The Alan Greenspan of the mid-1990s was the "Bubble Blower-in-Chief" as Federal Reserve Chairman.

Inflation Spurs Growth

This assumption is based on idea that, since people know that the value of their money is consistently decreasing due to inflation, people would be more prone to buy more goods instead of save money. This, in turn, stimulates the economy and allows it to grow faster than usual, hence, it is good for the economy and for everybody involved.

That’s a terrible argument.

That is to say that the government should has any say in whether it’s citizen’s decision whether to spend or to save their money. Everybody’s life and situation varies massively and the government should have no say as to what their citizens should do with their money.

Government may make suggestions as to what their citizens should do with their money, but it is absolutely no right of the government to decide on behalf of its citizens what is the best way for them to be spending their money.

As a matter of fact, inflation breeds risky behaviour if anything, as it becomes unprofitable for citizens to save money.

The proponents of consumption-based stimuli overlook the essentiality of saving. While burying your money in the ground wastes its talents, most save via bank accounts or through the purchase of capital assets. Thus saving makes investment capital available for new businesses hiring new workers and creating new products that sustain and beautify life. The accumulation of capital drives growth.

Inflation discourages saving. Inflation buries capital into the ground as people flee toward real estate as a protective hedge. Inflation stymies growth.

Inflation causes citizens of an Economy to make riskier decisions

If putting my money in the bank pays me 1% interest per year, but the yearly rate of inflation is at 2%, citizens are at a net loss from having their money in savings accounts.

Inflation spurs citizens to make riskier decisions like having their money be in the stock market instead, where often times, the rate of return is higher than the rate of inflation, but the risk of losing money is also exponentially higher.

This is not theoretical, in the US, the phenomenon known as “The Great Money Migration”, where mass amounts of citizen’s savings began to move into the stock market and is very well acknowledged and documented.

Going as far back as 1983, when this article was written, a huge influx of money started moving from savings accounts into the stock market, where, at the very least, citizens may turn a profit on their capital.

This is terrible for the stability of the economy.

The more money in the stock market, the riskier the economy


A similar phenomenon nails your wages. As your salary increases, you pay more taxes even as you can afford less. A two percent raise increases your tax bill two percent, but if prices also rise only the IRS derives any benefit.

In times of duress, in a recession, a depression or war, savings are what keeps a country afloat.

When there are no savings to turn to, governments will then often turn to printing money at an extremely risky rate to pay for things they cannot afford.

This leads to a situation of hyperinflation where the currency in question becomes worth a fraction of its previous value and chaos within the economy ensues as savers who have spent their lives saving money, see the value of their savings evaporate into thin air.

For the same amount of money, what may have been able to afford them the security of purchasing a home, soon becomes not even worth the value of a motorbike.

This is once again, not a theoretical statement at all. Venezuela was the last victim of hyperinflation, where the value of their currency, the Bolivar, hyperinflated at 1800% across just a few months.

Inflation sucks away a piece of your savings every year. Hyperinflation does the same every day, which is why it is so destructive.

All throughout history, every single opportunity an entity of power has had to inflate a currency, it has done so, and in every instance known in history of inflation, it has ended in disaster after causing much suffering caused to its often unknowing and unwilling citizens.


Currently, inflation is currently. the most rampant it has ever been than ever before with the widespread use of Fiat currencies all throughout the world.

Right now, every country in existence uses Fiat currencies which are not backed by any physical or accountable commodity. As such, inflation is occurring to every single person at all times.

As long as you have paper money, issued by a central bank and government at this moment, your money is slowly becoming more and more worthless as we speak. By virtue of having a majority of your equity in a fiat currency, you are being stolen from consistently.

This is the first time in history that inflation has occurred on a global level, as it is the first time in history, that the entire world has functioned based on fiat currencies.

A situation which has lasted less than a 100 years when the US abandoned the “Gold-Standard”
where currency was back in Gold in 1933, which the rest of the world followed suit.

Since then, the ability for governments to manipulate the flaw in fiat currencies was made available. Since then, inflation has caused major problems globally.

Hayman Advisors

To the best of our knowledge, there has only been 160,000 metric tons of gold EVER mined in the world. At $950 per ounce, all of the gold in the world would be worth $4.887 trillion dollars. On the other hand, we estimate that there is roughly $60 trillion of fiat money (including currencies, deposits, savings, money markets and CDs) in the world. Given the fact that world governments are caught with so much credit market leverage and losses, we believe that they will – in true Keynesian color – attempt to print their way out of this mess. If this occurs, you have to ask yourself: How many of people do you think it will take to begin to question the value of paper currency when it is being debased in an attempt to save world governments?

Inflation should not be something any individual should tolerate.

Inflation is by no means ‘normal’ or has any part to play in a healthy world economy.

Inflation allows governments to callously overspend and pay off debts by inflating their currencies, in doing so, directly stealing from their citizens.

Inflation has ruined entire civilizations, and it currently ruining ours. The trajectory of where inflation is leading the global economy is one that anyone and everyone should be concerned about.

Aside from the fact that it is theft, this is a much bigger issue, this issue will lead to a major economic collapse. If you look at the chart between inflation rates in Ancient Rome and the US Dollar, you will clearly see a very familiar trend.


It may seem like I would be extremely depressed about the situation, given how I have described the entirety of the issue of inflation.

However it is quite the opposite. I am simply stating the facts and truths as they are. What is important is that more individuals understand what is actually happening. Once they do , they may go out and make informed decision about how to best manage their finances.

The great news is that there exists, right now, more avenues than ever before, for any individual to avoid inflation. If you were reading this article, which could be written in exactly the same way 10 years ago, the options that would have been proposed would be investing in properties and precious metals.

Given that you are an average individual, being proposed the solution of investing in properties or precious metals, odds are you will not take any action for sheer virtue that both those options require massive capital to even get started.

The good news is that is no longer the case. The proliferation of cryptocurrencies and blockchain-based coins give you an explosion of options to invest your funds outside of fiat currencies in an amazing array of projects and commodities, a few at least, you would be passionate about.

With a means to invest in even micro amounts of funds.

I am extremely glad that a real solution to avoiding inflation has exploded into existence in such a short span of just 9 years.

Much can be done and to participate in this revolutionary technology and what I absolutely love about it, is that anyone may participate in a mass array of variety of activities within the space is absolutely amazing.

The inclusionary nature of the Blockchain Technology is the defining factor that makes it revolutionary.

Knowing what is happening and what can be done is a great place to be. Now more so than ever before, we as individuals have more power to do something about this than in the past. So let us not sit around and say nothing can be done, a lot can be done and should be done!

So I say go out there, find a project that you are passionate about and start shifting your funds away from fiat currencies!

God Speed Brethren.

Older Posts :

Highest Paying Bitcoin Faucet :


Definitely worth the 100% upvote, resteeming and sharing!

Delving into the history of currency histories opens the eyes to matters of facts rarely dare delving upon. Thanks a lot for this excellent piece, I'm sure it is greatly enlightening for many. I will also gladly share that one with people needing the education too and I already look forward to the next ones!

Namaste :)

Thank you so much for dropping by @eric-boucher! Your support on my journey since my arrival and even now in multiple aspects is really something I did not expect.

I am pushing forth in my nightly practice and pushing to breakthrough in both realms soon enough.

Nonetheless, my utmost appreciation for knowing and engaging with you.

God Speed and Namaste Brethren.

Your words are greatly appreciated, kind and heartfelt here. Much gratitude for it all and beyond, namaste :)

We need deflation, people will still spend knowing the left over will still be more worth over time.

Thank you for your generous upvote! I am glad to see you enjoyed my post!

We definitely do. If a country's economy is booming, by default, the currency should deflate, however, as long as governments are given the opportunity to inflate a currency even during the good times, they will. Looking at you China.

Also, this will be a pretty sick curation reward for you. xD

Great article!!! It is so easy to get accustomed to the current state. I like the original concept of one coin per days work from a skilled worker. We are in this weird cycle where we just expect a raise every year due to inflation.

Hey @jjacli! Thank you for dropping by!

It is so easy to get accustomed to the current state.

It absolutely is. That's what makes it so sinister. Not to mention the fact that you are in the know of how inflation affects you and yet, this is the case, what about someone who has no clue on the matter of inflation who is blindly being stolen from? That is majority of people.

We are in this weird cycle where we just expect a raise every year due to inflation.

Why do both citizens and businesses have to adjust their prices and wages so that they can be stolen from? What about the additional fact that taxes are never "Adjusted for Inflation"? That leads to even further theft.

Anarcho capitalists will tell you that taxes itself is theft too!

Hi everyone, if you make it to the end, thank you for sticking all the way through. This is an important message that I hope more people may understand and see how massive an impact it can have.

It is up to individuals to turn this ship around, and for once, I truly it can be turned around with the use of Blockchan technology.

Please feel free to leave a comment, I would love to engage with anyone interested to finish the entire article!

God Speed Brethren.

Venezuela continues in hyperinflation. We Venezuelans live day by day with cost increases.

My heart goes out to you brethren, it is a terrible situation in venezuela. But Venezuela is also showing the world the solutions that Blockchain technology can bring..

May you enligthten our community a little if Bitcoins are actually making an impact in Venezuela?

thanks mate, that's what you want, learn and grow as a community!

Thank you for sharing this story, I enjoyed it and will reshare it.

Thank you very much for the resteem @originalflavor! I am glad you liked the post! Hope to see you around more often!

I’d be interested in hearing your take on ‘built in’ inflation in Bitcoin and Steem?

Hi again @brian-rhodes! This is my full response after educating myself more on the issue of 'in-built' inflation of inflation within which exists in both BItcoin and Steem.

Though, implemented in slightly different manners, both Bitcoin and Steem have a an 'in-built' function of inflation that is set with the release of more of it's tokens over time.

The case of inflation for both Bitcoin and Steem, in comparison to the inflation of fiat currencies by central banks is starkly different.

In both cases, the inflationary nature of the coins are implemented with the purpose of the long term advancement of the token itself and with very clearly intention and consensus as to their implementation.

With the transparency of the inflation with a reasonable effect of said inflation, widely available public knowledge, and of exact amounts. This then allows any individual or entity to then accurately calculate and presume a certain value of the token itself.

As such, it would not be classed in the same manner as central bank inflation and not deemed in the same class of theft for the differing factors to these cryptos as the inflation in question :

  • Is transparent and known from the start, hence can and should be calculated to the overall value of the tokens, and more accurate calculations as to the actually value of the currency is adjusted for.

  • Has a clear consensus as to why it done in this manner.

  • Will eventually cease production according to timeline.

As such, it is much more accurate to say that the term 'inflation' would fall short, I'd rather use the term 'currency reserves' as it's existence is clearly stated from the very beginning and can be accounted for as being part of the total sum of tokens in existence from the get go.

In comparison to central banks, whereby there is often no public consensus as to why there is inflation, it was not initially agreed upon to have said inflation at the beginning of the minting of the currency and worse of all can be done at will and spent unbeknownst to the public, whose money is actually being spent nor have a say whether that shoud be allowed.
Leaving the real economy to absorb it's expenditure ony after the fact when it is far too late.

In so making it theft.

God Speed Brethren.

Good stuff!

Hello good sir!

In regards to Bitcoin, it is to my understanding that is created as a naturally deflationary currency, as Satoshi Nakamoto modelled Bitcoin mining very much in the same way Gold mining works.

Extrapolating from my previous post : Chronicles of the Father of Blockchain : Satoshi Nakamoto, quoting Satoshi himself from comments he made on the Bitcointalk forum :

"natural deflation"... I like that name for it. Yes, there will be natural deflation due to payment mistakes and lost data. Coin creation will eventually get slow enough that it is exceeded by natural deflation and we'll have net deflation.

Those coins can never be recovered, and the total circulation is less. Since the effective circulation is reduced, all the remaining coins are worth slightly more. It's the opposite of when a government prints money and the value of existing money goes down.

If something about the deflationary nature of Bitcoin has changed, I do not know of it. If there is however, I'd very much like to know.

Steem Inflation

Coincidentally, I was just about to delve into understanding the workings of Steems inflation model as it relevant to my next post. I am currently not of full clarity of it's workings and would restrain from giving any opinion on the matter, but I will definitely come back to go through it. Once I have further understood it's working, which will also be part of the subject of my following post.

Would you have any thoughts or comments on this post? I am always looking for honest feedback so that I may grow.

Nonetheless, thank you for dropping by and finishing the long post. It is very much appreciated.

God Speed Brethren.

To understand better STEEM, start here, read the report then go down to the comments and you'll find people who keep up with this topic. Before this, STEEM inflation was set at 50% of the original STEEM tokens sold at the ICO - way out of line as was seen after launch. Good luck.

I do believe you are missing a link good sir.

I have actually begun my research on the matter, am I accurate on the fact that after the hard fork, the rate of inflation has since been adjusted to about 9.5% per annum decreasing at 0.5% each year?

The references I found for this :

STEEM Hardfork Version 0.16.0 Informative Post

What is the inflation rate of STEEM?

I am currently reading the post hardfork Steemit Whitepaper.

It’s an age thing! Ha!
This should be a good place to start. Stay well.

Much thanks! I have found the same article and read the entirety of it!

I have drawn my own conclusion on the matter to your initial question and will reply there as to not get drowned out and invisible to others!

This is a very good article - I've read all of it and I'm gonna do my research about fiat money in the philippines to make better decisions on how to manage my finances.

I am very glad I could help you better understand inflation! Thank you for taking the time to finish the entire article, I know it is a long read.


Thank you very much, it is very much appreciated!

It is haha - but I enjoyed reading. I was gonna resteem it but I'm on chainbb now - there's no resteem - I can't access any other front-end sites at work cause of website blocking. Thanks again!

I'm glad that you enjoyed the post! It took quite abit of time to create and the response I am getting from it so far is pretty endearing and pushing me to create more posts of similar manner!

Hope to see you around!

That'll be great - I'll make sure to share your work elsewhere to (Discord communities - Facebook - etc).

It is very very much appreciated! The response I am getting is really endearing!!

I want to engage as much as possible in the comments as well as to have a conversation on the subjects I cover.

Thank you once again for all the support!!

I always thought that how could printing more money out of thin air be sustainable. I read a news about Zimbabwe where hyperinflation has driven people into Bitcoin with such a rush that the local prize has risen over 13 000 (US)dollars/Bitcoin!

A great and throughout article, very well explained, I really liked the Starbucks analogy!

I always thought that how could printing more money out of thin air be sustainable.

It absolutey isn't. That's the issue, the fundamental problem I want to highlight is that until the ability for governments to be able to do so, they absolutely will. It doesn't matter how many times history tells us otherwise.

A great and throughout article, very well explained, I really liked the Starbucks analogy!

Thank you very much! I really appreciate it, I really want to bring massive value here on Steemit and I hope I did so this time round!


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