Voima Weekly #7 ¡Cambio, cambio!

Money. Photostock.

I traveled in Latin America sometime around 2010 and also visited Venezuela. The president then was Hugo Chávez. Already at the airport baggage claim you could hear it from every direction: “Cambio, cambio!”¹ — currency exchangers everywhere. The same continued in grocery stores and even hotel hallways, where housekeepers had a side business exchanging bolívars into dollars and euros on behalf of the better-off. Why? What makes an entire nation so obsessed with swapping its money?

The reason is simple: the local currency kept losing value². The euro and the dollar held their worth better against everyday goods, so it was economically vital for people to exchange their earned bolívars into stronger currencies to preserve their purchasing power.

The same challenge exists here too, though on a different scale – not because of a collapsing currency, but due to high taxation and costs. Last year we took a weekend trip with the family to a spa in Saimaa, in Lappeenranta. The apartment was called “Pearl of Saimaa” – a so-called pearl, but in reality just an ordinary apartment in a block of flats, modestly furnished. Still, it was fun, because traveling with your own family always is. But the weekend cost over a thousand euros. And the question remained: why does something like this cost so much?

When taxes, wages and employment costs rise, companies pass them on to prices – and in the end it shows up on the consumer’s bill. Finland is among the OECD countries with the highest tax wedge (the gap between the total cost of labor and what the employee actually takes home)³. Finnish labor is educated and of high quality, but in basic work (such as cleaning, restaurants, logistics) productivity does not necessarily grow at the same pace as costs. In Finland the employer’s single largest payroll expense is the pension contribution, which takes about a quarter of the wage bill – and together with other charges it often makes the total cost of labor nearly double the employee’s net salary. This makes work relatively expensive.

Unemployment in Finland is already approaching ten percent⁴. This cocktail is toxic. It is urgent to dismantle the disincentives so that any work is worth taking on. When people no longer rely on the state counter for everything – that office which only takes from one and gives to another – but can work in a way that leaves more for themselves, the whole country wins. Cuts are needed so that taxation can be eased – and then the economic incentives return to normal: people have more money to invest and spend, which also sets businesses in motion.

At the same time, the role of families and close ones is strengthened. When the tax burden is eased, there is more room to take responsibility for children and the elderly, for one’s loved ones – as in earlier times. Caring for families does not belong to the state, but to ourselves. Cuts therefore do not take life away, but bring it back closer to home and community.

Purchasing power does not strengthen on its own. It requires decisions: fewer state handouts, more work, less debt and more savings – preferably in gold rather than paper. Every step toward stronger purchasing power is a step toward a stronger nation.

–Marko Viinikka

Founder, CEO

Voima Gold Oy

¹ cambio = currency exchange, money changing.

² In 2010, inflation was around 25–30% per year. In the following years it spiraled out of control, reaching millions of percent during 2018–2019, before slowing back down to the hundreds of percent.

³ In 2024, Finland had the third highest tax wedge in the OECD for an average married worker with two children – 38.1%, compared with the OECD average of 25.7%. In 2023, Finland ranked first. Source: www.oecd.org

⁴ The non-seasonally adjusted unemployment rate among 15–74-year-olds – that is, the share of unemployed in the labor force – was 9.9% in June, compared with 8.3% a year earlier. Source: stat.fi

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.