Right now we are in the middle of a global financial collapse, meaning the world’s reserve currency, the paper dollar, is slowly eroding. Many fiat currencies like the dollar have come and gone over the years, thousands in fact. For the same reason that these other currencies have collapsed so is the dollar – money printing.
Paper currency has allowed massive debts to be created through the fractional reserve banking system in conjunction with the printing presses. As these debts were about to be defaulted on, ie. AIG, GM, Fannie and Freddie, the government determined that it would be better to print money and bailout these debts. They did this in the hope of putting a level of stability back into the economy.
This stability has not been created and I believe that many people around the world can sense that things are still not right and that we have a long way to go before they are stable. Monetary inflation will lead to greater and greater price inflation which will lead to bigger problems and thus more stimulus through printing presses. Right now we are in the initial stages of this problem and who knows how long it will take before the dollar finally collapses, could take decades.
The world has been on this experimental money printing track since Nixon closed the gold window in 1971, thus allowing central banks to print at will. It will not be until a new form of sound money is reintroduced that inflation will be contained.
But banks love paper money over real money (gold and silver). It allows complete freedom to the bankers to cover bad debts (bad bets) and it also allows unlimited capital to banks which in turn allows the banks to keep less money in reserves and achieve higher profits. The problem is that you and I, the taxpayers, are the ones who cover these bad debts with an obligation to pay the bankers back who in fact printed the money in out of thin air.
So the return to a gold standard isn’t in the cards, at least not for a while. Bankers have the power and they are not going to give it up easily. So the question for you and I is how do we survive financially?
The answer is in real money. Owning gold and silver is a vote of no confidence on the banking system and fiat currency. As the world continues to print money, those that own gold and silver will see their purchasing power maintained. This is why you hear quotes like “an ounce of gold today can buy the same goods and services as it did 100 years ago.” Gold and silver tend to keep up with inflation over the long-term. So if you want to protect yourself, add precious metals to your portfolio today while you still can.