Money, Gold and Inflation: Some history and observations

Gold, minted for facility, was initially used as money. The goldsmith’s receipt of depositors’ coin was used as currency and was the precursor of paper money. Banks then issued bank notes and governments also issued notes, which they declared as legal tender. The paper money was gradually delinked from gold by all governments to adopt deficit financing. This triggered inflation, putting common welfare in jeopardy. However, it is the depreciation in the value of currency and not inflation which causes surge in prices.