WHY UNDERSTANDING THE HISTORY OF INFLATION CAN BE IMPORTANT

If more people get to know why and how the inflation policy started in the area where they live, it might become easier for them to understand the implications of this policy and why we need to end it. At least this was my hypothesis when I wrote the book Fraudcoin: 1000 Years with Inflation as a Policy. I traced the policy where I live, in the region of Trøndelag in the middle part of Norway, back to 1050 AD. At that time, it was the tyrant King Harald Hardråde who ruled Norway.

Hardråde had served as the commander of the Byzantine Varangian Guard in the East Roman Empire. He was based in Constantinople from 1034 AD to 1042 AD. In this period, he most likely learned how the emperors used inflation to gain political control over the masses and the rural areas in his vast empire.

Hardråde came to power in Norway in 1046. In 1050 he killed Earl Einar Tambarskjelve, who was a powerful man in Trøndelag, and Einar’s son Eindride. Hardråde then imposed the death penalty on those who did not accept his coins, as he forced people to turn in their silver to his mints, in exchange for freshly made coins struck with the King’s symbols.

Hardråde set up mints in Trøndelag and the South-East of Norway, in the cities of Nidaros and Hamar. This was no coincidence, as he had little political support in these areas. Harald confiscated a share of the silver that the people handed over to the mint. He used this silver to produce coins that financed his political ambitions. Putting the new coins into circulation in the cities where he had little power, made it easier for him to gain political control over the young nation state.

Over the course of 16 years, Hardråde reduced the silver content of the coins from 90 to 33 percent. By these means, he could triple the amount of money, and increase his power and wealth accordingly. Prices probably tripled too, which must have been detrimental to most of the citizens. The rapid increase in the supply of money most likely sucked labour and capital away from the rural areas and into the cities where Hardråde resided and spent most of his money.

In the year 1066 AD he tried to conquer England. He had somewhere between 7,000 and 9,000 soldiers at his disposal as they set course for London. King Harold Godwinson ambushed and slaughtered Hardråde and two-thirds of his army in what has been known as the Battle of Stamford Bridge.

This bloody end of Hardråde’s reign also marks the end of the Viking Age. The final episode of our famous era therefore illustrates that inflation and war are closely connected and that the policy makes those who control the money production take high risks.

Today, banks create new money literally at the touch of a button when they grant loans. This happens with the blessing of governments and central banks. Once you understand that inflation is and always has been a policy, it gets much easier to understand how it still redistributes economic wealth and enables an ever-increasing concentration of political power. The history also teaches us how dangerous this can be.

The money supply was enormously inflated during the COVID-19 pandemic, and currently it looks like prices are spiraling out of the governments’ control. It's as if the people in charge have spilled paint all over the floor, and now they are huddled in a corner, fending helplessly with their brushes as they see more and more people embrace bitcoin and gradually begin to ditch the politically controlled currencies.

Let’s hope that the age of inflation as a policy is about to come to an end, and that understanding its history can help the people to get a long-lasting victory.

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Rune Østgård is the author of Fraudcoin: 1000 Years of Inflation as a Policy

Go here if you want to see what the readers say about the book.

You can buy the English version of Fraudcoin at Amazon. The Norwegian version is available at Gull er Penger, Ark and Norli. Contact me at rune@advokatostgard.no if you would like to have a signed copy.

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The illustration above is from the 13th century text The Life of King Edward the Confessor by Matthew Paris. It depicts the Battle of Stamford Bridge in 1066. King Harald Hardråde of Norway, the Viking Age’s great mint lord, is deadly wounded by an English cavalryman.