While looking through the Norwegian press and information about the Norwegian currency in the context of its recent disastrous exchange rate, we came across an interesting post on Twitter by Rune Østgård. He is the author of the book "Fraudcoin - 1000 years of inflation as politics" (org. title "Fraudcoin - 1000 år med inflasjon som politikk"). He also asks questions on Twitter about the sale of the crown by Norges Bank and what effect this has on the value of the krona and on inflation.
Here is what Rune Østgård writes about the policy of Norges Bank and its boss Ida Wolden Bache in her Twitter post.
Is Ida Wolden Bache and Norges Bank Turning the Crown into Junk Currency?
“The value of the Norwegian krone falls freely. Over the past year, it has fallen by 14% against the US dollar and by as much as 19% against the euro.
At the same time, the official statistics of the Norwegian Statistical Office on price increases in the last year amount to 6,5%. By the way, this is a statistic that very few now believe. Everyone is noticing that prices are rising much more than the SSB tells us. Even economists started shaking their heads at the sight of KPIs.
Speaking of economists, Norges Bank is most likely expected to raise its key rate again next week. It is a political game in which the leader of the central bank Ida Wolden Bache is at the center of events.
Citizens don't really understand more than that they have to pay for what's going on."
I'm going to do something about it," writes Rune Østgård
“High quality money means we can work closely with other people, even if we don't know them. (…) Poor quality money has exactly the opposite effect. They make us suspicious of each other and make it difficult for us to cooperate in building capital.
If we can't trust money at all, which happens when it depreciates rapidly, then civilization will be torn apart 1-2-3.
This is what happens in countries experiencing hyperinflation, ie when prices rise very fast and uncontrollably.
But we also get the same effect when price inflation is high. Even if the overall price increase is relatively low, the same is happening. It's just a matter of degree differences.
The state of nature is monetary freedom. This means that we can use the money however we please. In a state of nature, the total money supply in a society will usually be fairly stable. (…) The political condition is not monetary freedom but monetary monopoly. This means that we have to spend the money that politicians decide we have to spend.
The political situation also means that the money supply increases. It grows because politicians want it to grow. And when that happens, money constantly loses value. This becomes apparent as the overall price level rises. (…) A sharp decline in value means that the money is of very low quality. It also causes us to lose confidence in money. We lose trust in them because they cannot store values for us, such as the value of our work effort.
Therefore, in modern Norwegian society, we get rid of money as quickly as possible. We do this by buying all kinds of garbage, most of which we have no use for. And instead of saving, we are in debt.”
We take out huge amounts of credit,” continues Rune
“Norwegian households have been at the top of the world when it comes to taking advantage of credit opportunities. We only lose to Denmark.
Norwegians have become debt slaves bathing in a sea of low-quality consumer goods. This is what happens when shitcoins are the only thing we can use.
The reason politicians want a monopoly on money and an increase in the money supply is because it is one of the most powerful tools they can use to redistribute value.
The redistribution that monetary policy causes is a transfer of value to the state and the richest above all others.
Tax and hidden subsidy
“Monetary policy therefore functions as a hidden tax and a hidden subsidy at the same time. Over time, the effect becomes serious. For example, public spending was only 6% of GDP in 1900, while in 2020 it was as much as 66%. Other factors such as taxes and duties are also important reasons for this. But monetary policy is "at the bottom" and absolutely crucial to make that happen.
In addition, the richest one percent of Norwegians now own 20% of all wealth in Norway. This means that many of them are now on their way to becoming Swiss, after enjoying the benefits of Norwegian monetary policy for many years.”
What do bankers do?
“Central bankers don't like to talk about the effects of an increase in the money supply on prices and society. And they never mention the redistribution effect.
An important part of their job is to distract people from what they are really doing. Instead, they talk about what they believe are completely different reasons for the price increase.
In her annual speech on February 16, Wolden Bache said that inflation price in Norway is due to Russia's invasion of Ukraine, which "is leading to a sharp increase in energy and raw material prices... which has resulted in increased costs for companies, which in turn has translated the increased costs into prices for consumers." She also said that "the high price increase is also related to strong demand and low available capacity in the Norwegian economy."
Wolden Bache, on the other hand, didn't mention that Norges Bank had increased the money supply by as much as 30% over the last three years.
In contrast, she said a "weaker krona results in increased increases in import prices."
"But she didn't say anything about the crown sales that Norges Bank does when they have to exchange tax revenues from oil producers before transferring money to the Oil Fund.
Andreas Steno Larsen is one of the world's best-known macroeconomic analysts. He has repeatedly warned that Norges Bank is selling too many crowns for the tax revenue the state receives from oil producers.
Here Steno Larsen points out that Norges Bank thus increases the money supply. As mentioned in the introduction, this led directly to the decline in the value of the Norwegian krone, both against the euro, the dollar and against Norwegian goods and services. The Norwegian media remained silent for a long time and read his criticism. On April 25, DN finally understood that it was necessary to write about this case. Then it stated that
“Realistically, the krona would be 10 to 15 per cent stronger than it was on New Year's Day if Norges Bank were not selling the krona. They have weakened the course so much. There is no other significant reason for the weakening of the Norwegian currency, he states.
Bjørn Roger Wilhelmsen, chief economist at Nordkinn Asset Management, told DN that he agrees with Steno Larsen."
Norges Bank solves the problem by raising the interest rate
“Norges Bank had the opportunity to make a statement. Press manager who got a sour job. He also disagreed with Steno Larsen. Instead, he decided, on behalf of Norges Bank, to shrug off responsibility, saying the sale of the crown "is based on forecasts by the Ministry of Finance".
And DN didn't ask the hard questions. For example, they did not ask the press manager if this agreement meant the central bank had lost its independence. Of course they should have.
The sale of crowns by Norges Bank increases the money supply. This weakens the value of the crown. And then of course the prices in Norway are still high. This is in line with Wolden Bache's explanation of the reason for the high price increase, cf. she blamed this year on high import prices.
Norges Bank solves this problem by raising the interest rate. They do this to force Norwegian households to spend less, so that the prices of consumer goods and services fall.
The Norwegian state owns 34% of GNI. The rest is owned by various investors. The redistribution in favor of the state and the rich therefore continues uninterruptedly.
Norges Bank is giving Norwegian citizens what Americans call a "double hit" every day with a combination of high prices and high interest rates.
They manipulate the money supply and slowly but surely destroy our society. And they do it covertly. None of us were taught this in school. And the media doesn't get it either.
Monetary policy is therefore a game that only a few understand.
There is nothing more to say about it other than that people are being deceived."
It's a fragment. The entire Rune Østgård entry can be found by clicking here HERE.
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