Is Gold Really the Culprit Behind Boom-Bust Cycles? The Real Scam Revealed

The Gold Standard: Wealth Creation or Boom-Bust Engine?

The Austrian Business Cycle Theory (ABCT) lays it out: meddling with the money supply through central banks is a recipe for disaster. Central bankers artificially lower interest rates, creating a fantasy land of cheap credit that distorts economic reality. The result? A rollercoaster of booms and busts, with the elites cashing in while the rest of us foot the bill. But here’s the kicker: some argue that under a gold standard, even an increase in the gold supply could trigger similar economic chaos. Sounds scary, right? Let’s unpack this.

When miners pull gold from the earth, they’re creating wealth. This isn’t central bankers conjuring money out of thin air. This is blood, sweat, and gears extracting something real, something tangible. But critics claim that even this process could mess with market interest rates and spark a boom-bust cycle. Not so fast.

Economist Murray Rothbard smashed this idea to pieces. He argued that gold mining adds to the pool of wealth—it doesn’t create an illusion of wealth like fiat money or unbacked credit does. Gold mining doesn’t punish savers or redirect resources into doomed ventures. It’s an honest exchange of something for something. Compare that to fiat currency: an exchange of nothing for something—a legalized con job.

How Fiat Money Triggers Economic Carnage

Central banks, with their monopoly on money creation, are the ultimate architects of economic instability. They pump out fiat money—backed by nothing, valued by decree—and use it to inflate the economy. Commercial banks eagerly join the party, issuing loans with imaginary reserves. It’s all a game of musical chairs: the music stops, and guess who’s left standing with nothing? The regular guy trying to run a business or keep his family afloat.

Here’s how it works:

1. The Boom: Central banks drop interest rates, making credit dirt cheap. Businesses and consumers start borrowing and spending like there’s no tomorrow. It’s all fake prosperity.
2. The Bust: Reality hits when the cheap credit dries up, and those unsustainable ventures start collapsing. Jobs vanish, businesses shutter, and the economy tanks.

This isn’t capitalism—it’s cronyism. It’s a rigged system designed to funnel wealth from producers to speculators and bureaucrats.

Gold: The Honest Alternative

Now let’s circle back to gold. Unlike fiat money, gold is produced through effort and exchange. When a miner extracts gold, he’s adding to the pool of resources available to society. He trades something valuable—gold—for goods and services, creating wealth without deceit. There’s no "wealth siphon," no hidden hand redirecting resources to favored cronies.

Could a sudden flood of gold cause market fluctuations? Sure, any change in resource availability has ripple effects. But fluctuations aren’t the same as fraud. A boom-bust cycle requires an artificial money supply expansion—a deliberate distortion by central planners. Gold doesn’t play by those dirty rules.

And let’s not forget the historical context. When the world ran on the gold standard, the economy grew more steadily. Real wealth grew. But when central banks took the reins with fiat currency, we got the Great Depression, the 2008 financial crisis, and everything in between. Notice a pattern?

The Central Bank Scam: Embezzlement in Plain Sight

Fiat money isn’t just bad economics—it’s theft. Central banks use inflation to rob savers and reward borrowers. They bail out the reckless and punish the prudent. Inflation is just a fancy word for wealth redistribution, and you’re not on the receiving end.

When central banks print money, they devalue what’s in your wallet. It’s a stealth tax, an invisible hand in your pocket. Worse, it incentivizes reckless spending and speculation over saving and investment.

The system isn’t broken; it’s designed this way. Every boom-bust cycle, every market crash, every bailout, is just another tool in the hands of those who benefit from chaos.

Call to Action

The lesson is clear: don’t let them demonize gold or the free market. The problem isn’t honest wealth creation—it’s the shadowy system of fiat money, fractional-reserve banking, and central bank manipulation. Arm yourself with the truth, and take back control of your financial future.

Download Seven Steps to Protect Yourself from Bank Failure and learn how to keep your wealth out of the hands of embezzlers in suits. Don’t wait for the next crash—prepare now.

Stay skeptical. Stay informed. Stay free.