The Stolen Wealth
If a new invention makes society more productive, deflation will occur because the same amount of currency will buy more things. If there are more goods in society being chased by the same amount of currency, prices will decrease in order for goods to attract buyers.
Our experience during the past 40 years has been exactly the opposite, as prices have risen. Electricity, electronics, and computing have made society far more productive than we were 150 years ago when reading a book had to be accomplished under a candle. Certainly the amount of things that are available to purchase now, far outnumber the amount of things that were available to purchase 150 years ago. Thus, we should have experienced massive deflation as the amount of dollars chasing additional goods would reduce prices. But instead, we experienced extraordinary inflation causing prices of goods to increase at substantial rates.
This means that those who saved have seen wealth dissipate over time. Where did it go? Well it went to many different places, but one of them is to the banks. The banks loan money to the people out of thin and at interest. As that new money starts to flow through society the prices of goods rise and the amount of debt accumulated by civilians also increases.
Since currency is not in itself production, but rather a store of prior productivity, loaning it out of thin air to people at interest does not add any additional goods to society. What it does is drive the price of all goods up causing the people to require more currency to buy the same amount of stuff. Who wins, well the banks. Henry Ford said “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.