We've talked before about the problems of a fiat currency -- meaning a currency that is just created out of thin air, and thus can have an infinite money supply, which can greatly distort an economy. Typically, the money supply keeps getting expanded, which results in devaluation of the money (i.e. as they print more money, the money is worth less, and so it costs more to buy stuff). Moreover, as the money supply gets expanded, recipients of newly created money are essentially getting value at the expense of money already in existence. Thus, expansion of the money supply often results in a transfer of wealth. In this way, it is just like a tax, but one that is levied not through the forced confiscation of your wealth, but rather through rising prices.

That's bad enough. Perhaps a larger problem that this relates to, though, is that it allows central banks -- the authorities that manage a currency -- to transfer wealth from one currency to another, from one nation to another.

This is often done during times of war. In The Creature from Jekyll Island -- a fantastic book by G. Edward Griffin, truly one of the best books I've ever read (though you have to have a bit of an interest in monetary economics and conspiracy to find it compelling) -- Griffin explains how this was done during World War I:

Seventy percent of the cost of World War I was paid by inflation rather than taxes, a process that was orchestrated by the Federal Reserve System. This was considered by the Fed's supporters as its first real test, and it passed with flying colors. American inflation during that period was only slightly less than in England, which had been more deeply committed to war and for a longer period of time. That is not surprising inasmuch as a large portion of Europe's war costs had been transferred to the American taxpayer.

After the war was over, the transfusion of American dollars continued as part of a plan to pull England out of depression. The methods chosen for that transfer were artificially low interest rates and a deliberate inflation of the American money supply. That was calculated to weaken the value of the dollar relative to the English pound and cause gold reserves to move from America to England. Both operations were directed by Benjamin Strong and executed by the Federal Reserve. It was not hyperbole when President Herbert Hoover described Strong as "a mental annex to Europe."

The book America's Great Depression by Murray Rothbard confirms this view as well, and goes on to explain how this inflation of the money supply later resulted in the Great Depression. Likewise, we saw massive money supply inflation during the early part of this decade by Alan Greenspan's Fed, and thus we are in the midst of Great Depression 2.0. (There are some key differences, mainly that the previous depression was primarily deflationary, whereas this one will be primarily inflationary. See our previous coverage of inflation vs. deflation, here and here).

This essentially how a system of fiat currencies and central banking leads to world government. We basically already are under a world government, and have been for some time. Now is just the revelation; the time when this comes to understanding. How this plays out, though, is dependent upon our response: if we see this as the Truth that sets us free, than whats await us is the greatest renaissance mankind has ever known; an unprecedented festival of peace, prosperity, and individual liberty. If we close our eyes to the Truth, than the world government becomes larger, more visible, and more tyrannical.