WELCOME BACK!
I've definitely neglected my econ educational duties as of late (MONEY CLASS origin: #738907, #733580, all entries here)
Yesterday, my fellow Swede influencer (BTChick) pushed me toward writing something. Tl;dr: I'm not impressed by Bitcoiners' asinine (read: retarded) takes on money.
Bitcoiners might be the stupidest people around. Not because they know nothing or are misinformed, but because they – Dunning-Kruger style – think they know a bunch and thus say things very confidently… things that are just straight-up wrong and unfathomably stupid.
Yes, that’s right; I don’t think most Bitcoiners understand bitcoin (…or fiat, or gold etc.). Money illusion and unit bias runs deep — sometimes even in the wrong direction.
At some level, I find that my cosmic role in this Bitcoiner space is to help Bitcoiners understand their monetary asset better.
OK, amazing, sounds like typical runaway inflation, fiat money printing gone bad yes?? WE SHALL HAVE NICE OPERAKÄLLAREN MEALS!
Backdrop: What Money Does in Society
Money is a veil for real economic transactions (#793537); it's the hidden beauty of human cooperation (#780358). It's also why the monetary system can do its job reasonably well across magnitudes.
It’s not harder or more difficult to live your economic life in U.S., Iceland, or Sweden, even though their local currencies range across orders of magnutides $1 = 9.4 SEK = 123 ISK. Prices, wages, assets etc are quoted in 10-100x larger numbers… big(!) deal.
The first obvious and awkward error in BTChick's example is the USD translation: She just uses 11… which, fair enough, was what the market traded krona for in early 2025 — but for the last few months have been hovering around 9.5. So right off the bat, the numbers are wrong.
Second problem, in 1968 the USD/SEK is pegged at 5.17 in accordance with the European Monetary Agreement, a sort of proto-pre euro that many European countries abided by even before the gold pool broke in 1968 and U.S.-gold exchange standard fell off in 1971. (Like most Bitcoiners, BTChick would have no idea about this because... duh, monetary history/reality isn't sexy.) P.S., pegs are fake stories (#747181) and they break, but whatever; in 1968, they held.
Meaning, here are the dollar amounts she should have used: 2.32+6.19+1.16+1.06 (+ 12.5% service)
sum = 12.08 (not $5.70, as she claims).
Third, median household income in the U.S. in 1968 was about $7,700, meaning a two-person household could have afforded 53 of these meals every month (had they spent their entire pre-tax income on that.) A random sample of 1968-69 luxurious dinners in American cities return numbers in that price region, too (between $10 and $25, e.g. Caravelle, Le Mistral, Four Seasons, Tadich Grill etc). So, with their full 1968 pretax incomes of $7,700, a median household could have afforded between 43 and 24 (very) fancy and luxurious dinners in equivalent American cities at the time.
(Sweden is somewhat of a poorer country than the U.S. in 1968… also, these are hypothetical pre-tax, and with a higher tax regime the take-home wage for a Swedish person in 1968 would be way less than their equivalent American income-earner.)
In 2025, using her 2,000 krona ($212) estimate, a regular two-person American household (83.7k income) could afford about 33 of these meals today.
In 2025, the average(!) monthly income in Stockholm in 2024 is 46,600 kr pretax, meaning a two-person household could have afforded about 47 of these meals today (using BTChick’s 2k estimate) assuming their full pretax income went to Operakällaren meals.
Fourth, if you worked in service industry in Stockholm in 1968 – ranging from head chef to hotel receptionist – your monthly pre-tax income would have been between 1,235 ($239) and 2,300 ($445), meaning you could have afforded 20 to 37 of these meals, respectively – smack two of those together, and you’re roughly on par with that American two-person household I quoted above.
That is, in Operakällaren meal terms we are about as well off today as her grandparents were 56 years ago.
The affordability of a dinner at upscale Stockholm Operakällaren is about unchanged between 1968 and 2025, even though the numbers are much bigger.
This isn’t about prices going up. This is about our money melting away.
No, this is about monetary economics and reality. The ability to think through money illusion and unit bias. … but more importantly about wealth and income pushing up the relative price of nontradable services like restaurant meals in fancy downtown Stockholm establishment. In other words: if we rerun history with gold or bitcoin instead of fiat, the price of a night at Operakällaren would have seen ROUGHLY this change regardless.
Also, see what I’ve done here? I sidestepped the CPI convo.
Much debacle about money comes through the exact price deflator used – the further back you go, the less it makes sense to use a price index (how do I quality-adjust for high-speed internet, electricity, air fare??). Instead, I compared likes with likes: prices of a real-life good (well, service) and the real-life incomes at the same points in time.
reductio ad absurdum comparison:
OMG I spent the night with my OG Bitcoin friend. He showed me a receipt from the summer of 2011 when he purchased a sofa for 5,000 bitcoin... Woah, like the world's most expensive piece of furniture. It really goes to show how hard seating asset are amazing; it isn't about Bitcoiners massively overpaying on sofas... since a nice sofa today would set me back 0.015 BTC... it's about sofa's CRASHING in value.
In this scenario, everybody understands that the number of bitcoin transacted is irrelevant without
a) the dollar price BTC/USD
b) what other prices are in the economy in 2011 (i.e., incomes vs sofa prices in 2011)
Same things go with fiat prices in the past. They must always be put in relation to other current numbers (incomes, relative prices); that's not different in bitcoin -- saying that you spent X BTC on something isn't an eternal, meaningful way of communicating value. Needs to be put into context, timeline, reference, incomes and real-world prices.
Fiat, as any monetary system, is a way to compare likes with likes; saying that you zapped me "generational wealth" for this educational SN post is funny (but stupid...). Because it isn't and wasn't generational wealth when you did it. (and you replace those sats by earning more and/or buying more with filthy fiat).
That's today's little money lesson.
Peace,
/J