John Ezinga

Let’s start with three assumptions that we consider rock-solid. 1. Government spending will continue to grow. 2. The government will need more currency debasement to finance that spending. 3. Wages will not keep up. If we had to distill this into a single point, it would be: You can’t outrun the money printer by working harder. You need to own the right assets or fall behind. Owning inflation-resistant assets matters more than income, though income still matters. Let’s zoom out and look at the big picture. The following chart tracks gold, the S&P 500, the money supply (M2), median housing prices, wages, and the CPI over the past 62 years. According to the rigged CPI, prices rose 977%, while wages rose 1,179%. The official numbers claim that wages have outpaced inflation since 1964. Yet anyone with eyes to see and a functioning brain knows that claim is false. Reality lies in a different ballpark. The government uses the CPI as misleading propaganda to conceal its atrocious currency debasement. The growth in the money supply provides a better measure of the damage. It grew 5,775% over the same period. In other words, wages kept pace with about 20% of the currency debasement. Relative to the money supply, wages lost about 80% of their value. To us, this better reflects reality and provides a sound benchmark and hurdle rate. If your wealth does not grow at least as fast as the money supply, you are losing ground and heading down the road to serfdom. Median housing prices rose 2,070%. Housing outpaced wages but failed to keep pace with currency debasement. Gold and the S&P 500 outran currency debasement. Now let’s look at the same data starting in 1999. It tells a similar story. According to the CPI, prices doubled, rising 100%. Wages rose 140%, outpacing the government’s official inflation measure. Housing rose 156%, beating wages but falling far short of the 427% increase in the money supply. The money supply has grown to more than five times its 1999 level. That is why $1 million does not buy what it once did. The S&P 500 rose 523%, with currency debasement driving much of that increase. Gold won, rising 1,549%. This illustrate the main implication of the currency debasement megatrend: You can’t outrun the money printer by working harder. You need to own the right assets or get left behind. Housing has not kept pace, and we do not expect it to. You need to own gold and the right stocks if you want to outpace currency debasement. Remember, this process compounds. Year after year, asset prices and capital gains grow faster than wages. Over time, this dynamic has created a deep divide between asset owners and wage earners. We expect that divide to widen. In this age of ever-increasing currency debasement, your top financial priority should be to join the asset-owning class, where your wealth grows and compounds with currency debasement. Otherwise, you remain a wage earner chasing fiat dollars that lose value each year. In the fiat system, owning assets pays better than selling your labor. And it’s not even close.