1. Inflation – this is when the economy is accumulating more currency, in the form of debt. The more currency created (whether via printing press or electronically) the less value (purchasing power) that currency has.
2. Value – the measure of relativity between any two resources within an exchange
3. Fiat money – currency a government declares as money, and just like the paper that comes with a game of Monopoly is called money, the value of that money is retained just the same. The value is anchored to a presumptuous unspoken promise.
Paper currency is fiat money. The currency you receive in exchange for the labor (time) you invest at your job, or from selling goods/services, is funny money (does not retain or preserve value). During inflationary periods in the economy, the purchasing power of that money steady depletes, meaning it takes more of it to buy the things you need/want like:
- Food
- Energy
- Shelter
- Clothing
- Entertainment
…but Gold and Silver is considered “real” money in its ability to preserve value.
2. Value – the measure of relativity between any two resources within an exchange
3. Fiat money – currency a government declares as money, and just like the paper that comes with a game of Monopoly is called money, the value of that money is retained just the same. The value is anchored to a presumptuous unspoken promise.
Paper currency is fiat money. The currency you receive in exchange for the labor (time) you invest at your job, or from selling goods/services, is funny money (does not retain or preserve value). During inflationary periods in the economy, the purchasing power of that money steady depletes, meaning it takes more of it to buy the things you need/want like:
- Food
- Energy
- Shelter
- Clothing
- Entertainment
…but Gold and Silver is considered “real” money in its ability to preserve value.
Watch Your Wealth like You Watch Your Health
The “no preservative diet” may be good for your health, but ironically it is not good for your wealth. If you want to preserve the value of your wealth then the smart thing to do is to use financial preservatives, which is exactly what precious metals are intended for. This is where the expression “worth its weight in gold” comes into play.
Honey, Did You Remember the Bread?
If you are going to preserve your bread then you are going to place it in something that will contain that value, for later use. If you leave your bread on the kitchen counter it will mold and lose value much quicker than if you had placed it in a bread box or the refrigerator. This same metaphor applies to the bread you keep in your pocket, in regard to preserving its value by investing it in silver and gold.
You see, this is why you lose if you are only putting your currency into a savings account. This is just like leaving a loaf of bread on the kitchen counter to mold away. During economic inflation, interest rates are too low to keep up with the depreciation of currency for savings accounts to be a viable way of preserving the value of your capital. Using some of your funny money you get paid from your employer or clients to purchase silver/gold bullion is like placing the bread into the box or refrigerator, the value of that currency will be preserved for later consumption.
Yeah but again, You Cannot Eat Gold and Silver…uh huh huh
For those of you who are still clutching tight to your cash, I want you to read “WILL THE VALUE OF PRECIOUS METALS GO UP IF FIAT CURRENCIES COLLAPSE?”. I address the whole “Mad Max” and post-apocalyptic arguments there. I do not believe our economy is going to see that dramatic of a collapse, before we see a transition. I feel confident with investing some “Monopoly” money into silver and gold, that is to invest in real money. The gradual economic decline will leave society’s everyday norms wondering why it’s taking more and more of their fiat money to buy a loaf of bread, while you and I will understand that will act as a sign of our silver and gold becoming increasingly worth more loafs of bread. Next time I will share how to invest in gold and silver as a hedge against inflation.
The “no preservative diet” may be good for your health, but ironically it is not good for your wealth. If you want to preserve the value of your wealth then the smart thing to do is to use financial preservatives, which is exactly what precious metals are intended for. This is where the expression “worth its weight in gold” comes into play.
Honey, Did You Remember the Bread?
If you are going to preserve your bread then you are going to place it in something that will contain that value, for later use. If you leave your bread on the kitchen counter it will mold and lose value much quicker than if you had placed it in a bread box or the refrigerator. This same metaphor applies to the bread you keep in your pocket, in regard to preserving its value by investing it in silver and gold.
You see, this is why you lose if you are only putting your currency into a savings account. This is just like leaving a loaf of bread on the kitchen counter to mold away. During economic inflation, interest rates are too low to keep up with the depreciation of currency for savings accounts to be a viable way of preserving the value of your capital. Using some of your funny money you get paid from your employer or clients to purchase silver/gold bullion is like placing the bread into the box or refrigerator, the value of that currency will be preserved for later consumption.
Yeah but again, You Cannot Eat Gold and Silver…uh huh huh
For those of you who are still clutching tight to your cash, I want you to read “WILL THE VALUE OF PRECIOUS METALS GO UP IF FIAT CURRENCIES COLLAPSE?”. I address the whole “Mad Max” and post-apocalyptic arguments there. I do not believe our economy is going to see that dramatic of a collapse, before we see a transition. I feel confident with investing some “Monopoly” money into silver and gold, that is to invest in real money. The gradual economic decline will leave society’s everyday norms wondering why it’s taking more and more of their fiat money to buy a loaf of bread, while you and I will understand that will act as a sign of our silver and gold becoming increasingly worth more loafs of bread. Next time I will share how to invest in gold and silver as a hedge against inflation.