From my article, "Government's Perennial Enemy":
It's very difficult to inflate sound money because sound money, by its nature, is difficult to create. It emerges in trade as a highly marketable commodity, but one that's also relatively scarce. Sound money starves the state but not the economy as long as prices are allowed to fluctuate. Yet there was once some confusion about gold's character. As Mises wrote in The Theory of Money and Credit (p. 416):
When in the 'fifties of the nineteenth century gold production increased considerably in California and Australia, people attacked the gold standard as inflationary. . . But later these criticisms subsided. The gold standard was no longer denounced as inflationary but on the contrary as deflationary.
It was considered insufficiently 'elastic' (deflationary) even during the period 1896-1914, when gold discoveries in Alaska and South Africa spurred an annual inflation rate of two percent. But clearly, the objections to a gold standard were not so much based on its alleged inflationary or deflationary tendencies but on the fact that the market controlled its supply, rather than politicians and their pals in the fractional reserve banking racket. Quoting Mises again:
It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of rights. [p. 414]
But constitutions and bills of rights are the products of government and are subject to government's shifting interpretations. We should never let politicians or central bankers 'interpret' anything for us, especially money. An authentic gold standard would be entirely removed from state influence, and for that reason would afford much-needed protection against government assaults on our liberty.