CodingInLondon on Nostr: “Kings enriched themselves at the expense of their subjects by collecting coins ...

“Kings enriched themselves at the expense of their subjects by collecting coins from their subjects and minting them into new coins with some base metals mixed in to lower the content of the precious metal. (…)

Although modern centralized governments no longer debase their physical coins, they nonetheless achieve something very similar by using legislation, the threat of violence, and monopoly power to force people to accept money certificates that are no longer redeemable in money as if they were money. With their redeemability suspended, money certificates become fiduciary media, which increases the overall supply of money. In the same way that kings profited by mixing base metals with precious metals, modern governments benefit by mixing fiduciary media with money. “

From
Principles of Economics
Saifedean Ammous