"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value"

The assertion warns that when money is not anchored to a commodity constraint like gold, savings become vulnerable to dilution. A gold standard imposed a hard budget constraint: the supply of money could not expand faster than the stock of gold without breaking the peg. Fiat money removes that constraint, leaving governments and central banks with broad discretion to create money, often to smooth recessions, stabilize finance, or fund deficits. The cost is inflation risk, which acts as a silent tax by eroding purchasing power. Savers, especially wage earners and holders of cash or fixed-income claims, bear that burden; debtors benefit as debts are repaid in lighter units.

Claiming there is no safe store of value underscores how pervasive currency risk becomes in a fiat regime. Most assets are ultimately priced in the unit of account. Bonds and bank deposits are directly exposed. Equities and real estate may keep pace with prices over long horizons, but they can lag in the short run and face idiosyncratic risks. Inflation-protected securities help, but they rely on official indices and political commitments. Even gold, the implied refuge, is volatile and subject to policy interventions and market cycles. Diversification mitigates, but cannot eliminate, systemic currency dilution.

The deeper point is institutional. Without an external anchor, protection of savings depends on rules, incentives, and credibility. Independent central banks, clear mandates, and transparent frameworks can restrain inflation, but they are not immutable. Fiscal dominance, when financing the state eclipses price stability, can reemerge in crises. Trust is therefore the true collateral of fiat money.

There is also a historical irony: the author later stewarded a fiat system that delivered lengthy periods of low inflation, showing that prudent policy can approximate stability. Yet the warning stands as a reminder that monetary freedom without discipline shifts risk onto savers, who must be active stewards, owning real assets, staggering maturities, and watching policy, because permanence of value is never guaranteed.