Do you believe there is an economic crisis looming? And are you prepared or do you even know how it will affect your ultimate wealth? In the near future, will we be just confirming our banking login at one of many internet banking institutions to access our digital coin. Or is the ultimate wealth going to be stored in the gold and silver values of coin gold, silver bullion coins, silver bars or is some other metal or commodity going to come into fashion?
I’m talking about the upcoming economic crisis that is being caused by the fiat currencies in almost all countries around the world. What about those bailouts? They are happening around the world. The bankers love them – all that fresh new money that gets deposited and they get to lend out due to our fractional reserve banking practices. Have you seen the money and digitally created money graph? For eighty years or more the money graph just slowly rose and we hardly noticed the inflation – that hidden tax. In my life time prices have gone up 10 times. And the money graph has now gone exponentially straight up. In the 1980’s we had million dollar bailouts, in the 1990’s bail outs were in the billions. And have you noticed the bailouts have been in the trillions recently? Is all that money getting us out of the current depression or just delaying and amplifying a crisis yet to come?
History shows us that there are two main types of depressions. The question is which one are we headed for?
1. A depression caused by deflation
2. A depression caused by inflation
The depression in Germany after WW1 was caused by inflation and that inflation accelerated into a hyperinflation with the printing presses spewing out worthless currency as fast as they could print.
On the other hand the great depression of the 1930’s in North America was caused by deflation. In the 1930’s the US dollar still had value because it was backed by gold and silver. It was receipt money. A receipt that was backed by the gold and silver supposedly held in the Treasury vault. Back then the US government did not print a lot of money to avert the depression because it was technically illegal to do so without adding more real money – i.e. gold to the vault.
In a deflationary depression savers are the winners because money still has some intrinsic value and was relatively scarce.
Now in Germany it was a totally different situation as the paper currency had absolutely no backing and no real value. It was a fiat currency like every currency in the world today. The German government could not make the payment on its war debts, so it simply printed more currency. The result was an out of control inflation. The German Reich-mark was nothing more than play money – Just paper with ink on it. The government continually printed more money. The public, the savers became the big losers as the value of the currency decreased. And as more and more were printed its value became less to the point of being worthless. The depression that followed was a direct result of the inflation of the money supply.
So is there a depression coming: a depression more serious than what we have now? The one thing that is certain is that if a crisis happens some people will win big and some will lose, possibly everything. And the big question is: what side will you be on? It depends on what type of depression it will be and how you prepare for it.
If it turns out to be an inflationary depression, a lot of people in North America will lose because all they remember are the stories of the tough times in the 30’s and how our grandparents survived. These past memories of the 30’s sway people to think that security is in cash and savings and pinching pennies. They expect a steady retirement check, social security, health care and government aid. They believe in cutting back and living the simple life.
Now few are prepared for a German style depression. One where: gold and silver coins, little cash and investments that adjust for inflation will have value. Investments such as oil, food, gold and silver stocks and some forms of housing will be the winners.
I see a whole world with fiat currencies. Many countries are printing more and more money to hide their problems. My bet is on a depression caused by inflation. Most countries are caught in a tough situation. If inflation takes off they can’t raise interest rates very far or they will end up defaulting on their interest payments on all the money that they have borrowed. Either way, the value of money in the public’s eye will decrease and we are headed into a hyperinflation. When? How bad? Who knows? Will we end up with an on line bank and digital coin to do transactions with an on line money transfer? And think about it, is there a conspiracy against your money and your wealth? Or will history repeat itself and gold and silver coins become the favored money?
Wealth is a decision. Your ultimate wealth will depend on the decisions you make in the near future. This may not be the time to believe most of the financial planners who work for Wall Street. What you do with your investments is going to affect your future. It’s time to get educated. Are you prepared to make the decisions?
Lee Coates – internet entrepreneur, http://www.DecidedlyWealthy.com is my blog for more articles about wealth and what’s happening in the world today. Sign up for my free take action training. The best defense in these uncertain times is a top financial education. Home study and seminars are available. http://thinkfinancialfreedom.com/?site=CAYM&t=article101