Inflation Is Legalized Embezzlement—And the Central Bank Is the Getaway Driver

We’ve been lied to.

For decades, Americans have been told that inflation is some abstract economic force—too complicated for the average citizen to understand—caused by everything from "greedy corporations" to "supply chain issues" to "geopolitical instability." The truth is much simpler, and far more sinister:

Inflation is theft. And the central banks are the thieves.

Frank Shostak cuts through the propaganda in his Mises Wire article, explaining what every honest economist already knows but few dare to say: inflation is not a "general increase in prices." That’s the result. The cause—and the crime—is the artificial expansion of the money supply.

And in a centrally planned monetary system, that expansion is deliberate.

What Inflation Really Is: An Exchange of Nothing for Something

In a true free-market system—where money is backed by tangible value, like gold—there is no way to create new wealth out of thin air. If you want more gold, you have to earn it, mine it, or trade for it. Production must precede consumption.

But in today’s fiat system, the Federal Reserve and its commercial bank partners can conjure new dollars with the push of a button. Nothing is produced. No value is added. Yet these fake dollars enter the economy and begin competing for the same finite pool of goods and services that real producers have worked to create.

This, as Shostak rightly calls it, is embezzlement.

It’s no different than a counterfeiter printing fake bills in his basement—except when the central bank does it, it's called "policy."

The Cantillon Effect: Who Gets Rich and Who Gets Ruined

When the Fed floods the economy with newly printed money, that cash doesn’t rain down evenly on Main Street. It flows first to the politically connected: Wall Street banks, government contractors, hedge funds, and federal agencies.

These early recipients of new money get to spend it before prices rise. They buy assets, real estate, stocks, and commodities at pre-inflation prices.

By the time that money trickles down to ordinary Americans—if it ever does—prices have already adjusted. Wages lag. Savings shrink. And the working class is left holding the bag.

This is the Cantillon Effect, and it’s the dirty little secret that every central banker knows but will never admit.

Inflation Isn’t an Accident—It’s a Strategy

Let’s stop pretending inflation is an unfortunate side effect of economic management.

It is the system. It is the model.

Inflation is how governments and central banks rob savers to fund deficits, bail out cronies, and preserve the illusion of growth. It’s how they finance endless wars, expanding surveillance states, and bloated bureaucracies—without ever having to ask your permission or raise your taxes.

Because inflation is a tax. It just happens to be invisible. By increasing the supply of money, your purchasing power is silently siphoned away. Your dollar may still have the same face on it, but it buys you less every year.

From Kings Debasing Coins to Central Banks Printing Credit

Shostak wisely reminds us this scam isn’t new. Centuries ago, kings would collect gold coins under the guise of re-minting them, then dilute them with base metals before returning them to the public. The people got back the same number of coins, but not the same value.

Sound familiar?

Today, the Federal Reserve doesn’t need to melt coins—it just expands the balance sheet. But the result is the same: more currency chasing the same goods, eroding the value of what little real wealth remains in the hands of producers.

The theft is just more sophisticated now—and harder for the average American to see.

The Great Inflation Lie: Redefining the Crime to Hide the Criminal

In the words of Ludwig von Mises, quoted by Shostak:

“To avoid being blamed for the nefarious consequences of inflation, the government and its henchmen resort to a semantic trick... They call 'inflation' the inevitable consequence of inflation, namely, the rise in prices.”

This rhetorical bait-and-switch is how the true culprits get away with it.

By redefining inflation as price increases rather than monetary debasement, the government gets to blame grocery stores, landlords, oil companies, or even weather patterns. Anyone but themselves.

And the Federal Reserve? They're hailed as the "inflation fighters," even as they ignite the very fire they claim to extinguish.

It’s the equivalent of the arsonist being put in charge of the fire department.

What You Can Do While the System Unravels

You cannot vote your way out of a fiat system. You cannot "reform" a central bank that was built to enrich the few at the expense of the many.

But you can opt out.

• Own real assets: gold, silver, Bitcoin—things the Fed can’t print.
• Hold fewer dollars: Diversify your savings into tangible stores of value.
• Get educated: Understand monetary history and policy so you’re not blindsided when the next crisis hits.

Final Thought: Inflation Is the Fuse, Not the Fire

The American economy today is a house built on quicksand, held together by credit expansion, propaganda, and political repression. The inflation you feel at the grocery store isn’t just bad policy—it’s a warning sign. A signal that the system itself is failing.

But remember: when a system is built on embezzlement, those who recognize the theft early have a chance to protect themselves.

Take Action Now:
If you’re ready to pull your money out of the burning building and reclaim your financial sovereignty, start here:

• 📘 Download Bill Brocius’ free guide: 7 Steps to Protect Your Account from Bank Failure
• 🔐 Join Bill’s Inner Circle newsletter for $19.95/month and get exclusive, boots-on-the-ground insights into what’s coming next.
• 💡 Read Bill’s book, End of Banking As You Know It, and see the full blueprint of how to break free from the Fed's iron grip.

The dollar’s days are numbered. But your freedom doesn’t have to be.

Stay sharp. Stay sovereign.