Voima Weekly #35 – Protect Purchasing Power – Act Early

The chart is based on data from the Federal Reserve and the Bureau of Labor Statistics (BLS), compiled via the FRED database. The blue line represents the development of M2 money supply, i.e. the total amount of dollars in circulation within the economy. The red line shows the purchasing power of the U.S. dollar over time. Grey areas indicate periods of recession. The chart illustrates a clear long-term relationship between the two variables: as the money supply expands, purchasing power declines. This dynamic is particularly evident after 2020, when money supply growth accelerated significantly. This is not an isolated phenomenon, but a visual representation of how money supply growth and currency purchasing power have historically evolved in relation to each other.

There is one thing we should address directly—without hesitation.

The amount of money in the world is constantly increasing, and in recent years, at an accelerating pace. When we talk about M2¹, we are not referring to some technical statistic, but in practical terms to how much money—euros, dollars, and other currencies is circulating in the system to measure value. And when more of these “measuring units” are created faster than actual value, their purchasing power declines. This is not an ideological view or a matter of economic school of thought — it is a simple mathematical consequence.

Since the abandonment of the gold standard, this dynamic has become structural. Money is no longer tied to any physical constraint; its supply is determined by political decisions and the need to sustain a debt-based system. When debt levels are high, they cannot be serviced at elevated interest rates without putting the system under stress. As a result, money supply is expanded—not because it is an optimal solution, but because the alternatives are even more difficult.

The effects of this are visible in everyday life, but often with a delay and frequently misunderstood. Wages may rise in nominal terms, asset prices may increase, yet purchasing power declines at the same time. For the middle class, this is particularly problematic, as wealth is often tied to currency, salary income, and a system that no longer protects it in the same way it once did. This does not happen overnight, but quietly, year after year — and that is precisely why it is not addressed in time.

When viewed from Finland’s perspective, the picture does not become more reassuring. We are facing structural deficits, an exceptionally large public sector, and already very high levels of taxation. At the same time, demographic trends are placing additional pressure on the system. These issues have not been resolved; they are being managed, and in practice, this means sustaining the system through increasing levels of debt and money supply. In other words, the same mechanism that erodes the value of money is also being used to maintain the system itself.

This leads to a conclusion that may be uncomfortable to state, but is important to understand: the decline in purchasing power is not a temporary phenomenon, but most likely an ongoing process that may even accelerate in the years ahead.

The question, therefore, is not whether this will happen; but how one chooses to respond.

A responsible individual does not build their entire financial security on a single variable—especially one whose value can be expanded by political decision. The principle is simple: not all wealth should be held in currency.

At this point, gold emerges as a practical solution.

Gold is one of the few assets that combines three essential characteristics. First, its liquidity is exceptional. Gold is traded globally in such large volumes that it can be utilized in virtually any market environment. For comparison, the daily trading volume of gold is roughly equivalent to about 72 times he entire annual transaction volume of the finnish real estate market². This primarily reflects the depth and efficiency of the gold market.

Second, gold is a universal asset. It is not tied to any state, political system, or single economy. It has no issuer and no counterparty. It is physical and simple—and precisely for that reason, it behaves differently from most other asset classes.

Third, gold has historically preserved its value in environments where the money supply expands. This is clearly visible across different currencies. In Sweden, the price of gold has risen from approximately SEK 70,000 per kilogram to nearly SEK 1.4 million. In Japan, the corresponding move has been from around JPY 500,000 to nearly JPY 25 million per kilogram. These examples are not simply about gold “generating returns,” but above all about the change in the value of currency itself.

This is not a standalone investment strategy—and it should not be. It is part of a broader approach aimed at protecting purchasing power and reducing dependency on a single system.

Let me say this directly.

If you have people you care about - family, children, loved ones. This is not just a personal financial decision. It is a matter of responsibility. Too many people only realize this when their room to maneuver is already gone.

That is why I encourage two things.

First: start yourself. It does not need to be large or perfect. Even small, consistent saving outside of currency is a step in the right direction.

Second: talk about it. Tell your friends, discuss it with your family, help those who have not yet stopped to think about this development. Not everyone follows these matters and not everyone needs to - but someone must.

It is often assumed that the current system will continue as it is. History does not support that assumption. No currency has preserved its purchasing power indefinitely.

Gold has.

The time to act is now. Not to wait for the perfect moment, but to act early enough.

– Marko Viinikka
Founder, CEO
Voima Gold Oy

Disclaimer: Voima Weeklies are the personal writings of the undersigned. They do not necessarily represent the official view of Voima Gold Oy or any other company, nor do they constitute investment advice or a recommendation to purchase securities.