I like coming up with ways to make currency debasement understandable to those who haven’t studied economics (Last time it was a bit deeper in the weeds with gold coinage). here’s a simple one:

  • You have a 1,000 square foot house.
  • At some point, the government declares that the term “1 foot” is now equal to 24 inches instead of 12 inches.
  • Now you nominally have a “2,000 square foot” house—when measured in this new unit.
  • But the physical size of your house has not changed.

Now imagine your town has an economy where people use the physical square footage of their homes as currency. Maybe it’s used as storage—locals have lots of little trinkets, and when you buy a loaf of bread from the baker, you give him “1 square foot” of storage in your house in exchange.

After the government changes the unit of measurement, you go buy your loaf of bread and hand over “1 foot” of storage. But now, that “1 foot” equals 24 inches of space—double what it was before. So the baker ends up with twice as much actual storage as he got last week, even though the number “1 foot” stayed the same.

What happened? The government redefined the measuring tool, but the real, physical quantity did not change. Yet now there are more claims on the same finite amount of real space—your house.

When governments debase currency, this is exactly what they do: they mess with the unit, not the underlying value. But the result is real—people can suddenly claim more of your wealth than before.

Monetary expansion doesn’t create more goods or value—it just increases the number of claims on what already exists. That’s how inflation quietly steals from your actual, real wealth.

This post can also be found on nostr