Over the course of history, societies have most often chosen gold and silver as money. Soon enough, governments decided they wanted a piece of the action, and kings and other rulers began to stamp their faces on the coins and monopolize the production of money. This, their people were led to understand, was a rightful attribute of sovereignty to which their leaders were entitled… what government monopolies on money production actually meant was that the rule could now loot the population by clipping the coins and debasing the currency, inserting some amount of base metal into previously pure coins and pocketing the difference himself…

Paper money suite governments rather better than coins of precious metal, since they could enrich themselves and their friends without arousing the suspicions and public hostility… It was also easier to blame scapegoats—wicked businessmen, speculators, and the rest … of people the population is taught to hate—for the rising prices that paper-money inflation caused…

Governments tend to oppose monetary systems based on precious metals because they impose restraints on ambitious politicians. Gold cannot be infinitely reproduce [ie you cannot just whip out $2,000,000,000,000 (trillions) of gold to finance a war or “stimulate” the economy] as can paper money. Even if paper money is used under a commodity standard, the paper is a money substitute that can be converted into the commodity whenever people demand it… Not surprisingly, government prefers a system in which the paper money cannot be redeemed into anything. Then it can increase the supply of money without restraint.