Tom Woods does an excellent job of explaining the connection here.

A smart-aleck line that opponents of gold use is that it’s wasteful to devote resources to digging gold out of the ground when the government can print paper so cheaply. If you look at the gigantic waste of resources in the housing market due to the ability of the state to create money out of thin air (the Fed doesn’t even need to print bills), you see what a lousy argument that is.

The separation of church and state is a good thing; we need to find a way to separate money and state too.