In a candid article penned by Rune Østgård, author of Fraudcoin, he brings to light the alarming realities of monetary policies and their effects on the ordinary wage earner. His illustration is laid bare in a powerful graph, demonstrating how the relentless money printing by governments is eroding the value of our savings and investments.
According to Østgård, about 60% of Americans and 50% of Norwegians are involved in stock investments and securities funds, respectively. However, few of these investors realize their stocks are losing the race against the devaluation of money in the long run. This is particularly so when compared to the prices of all types of economic goods.
The prime culprit behind this erosion of value is the inflation of the money supply, averaging 7% per year both in the US and Norway. This rising tide of inflation makes it nearly impossible for the average investor to beat the 7% increase rate of the money supply, especially when you factor in the capital gains tax and management costs.
In a startling revelation, Østgård points out that even with the inclusion of dividends paid to shareholders, the Oslo Stock Exchange’s main index (represented by the dark blue line on his graph) fails to keep up with the red line denoting the official M2 money supply.
The author also compares other forms of investment, namely real estate and physical gold. He notes that physical gold has performed just slightly below stocks and, considering the lower risk associated with it, appears to be a better investment than stocks.
The notion of home buying as saving is debunked in Østgård’s article, which demonstrates that the nominal price of average homes in Norway can’t keep up with the rate of money printing. As a result, buying a home becomes increasingly costly for wage earners over time.
Perhaps most disturbingly, Østgård’s article emphasizes how the current monetary policies have the most negative impact on wage earners, the group least equipped to bear the burden. This group, he notes, ends up paying for the profits accrued by the government and the wealthiest 1% of the population.
Through the prism of this enlightening data, Østgård makes a compelling case for alternatives like gold and Bitcoin. His work shines a harsh light on the economic realities of our time, highlighting the dire need for a more equitable monetary system that doesn’t penalize wage earners. Whether his insights inspire the change we need, however, remains to be seen.
