A reader of one of my previous articles, linked here, left this comment:
“That was kinda good idea to convert my paper dollar into gold and silver one. As I am reading the article, I was convinced, and all information I need was given and safeness of my money I think has no problem.” — Kalveinarthur
Kalveinarthur got right to the point of owning gold and silver. Here are my thoughts on what he had to say:
Your money (wealth) kept in the form of gold and silver is safe. Gold and silver protect whatever wealth you have converted into gold and silver. Your wealth kept in the form of paper dollars will be destroyed. That destruction is happening right in front of you right now, but most don’t see it or know it’s happening. The paper dollar is worth about 3 cents of what it was worth 99 years ago. That means 97% of that 1913 dollar is gone. That erosion is continuing, and will continue, and nothing will stop that erosion until the currency collapses. Everyday your dollar is worth less and less and the reason folks don’t see it is because they aren’t looking.
The only reason anyone takes your paper US Dollar as payment for a debt is that there is confidence that the next guy will also take it as payment for debt. When that confidence is gone, the currency is no longer of any value. Loss of confidence usually starts with quickly higher and higher inflated prices for everything. That happened in this country when the USA was just a few years old. The currency of the infant USA was the Continental Dollar, which the brand new US government printed by the millions. Citizens of the young USA quickly learned it held no value and they refused to take it in trade. Its collapse gave us the saying “not worth a Continental.”
Take a sheet of paper from a notebook and write the words “One Dollar” on it. Place it next to a US Dollar Bill. The only difference in what you wrote on the sheet of paper and the US Dollar is that one carries the confidence that the next guy will accept it, and one does not. Other than that, they are the same thing. They are both pieces of paper that say “One Dollar.” Neither one has any true wealth of any kind backing it.
The only reason right now that the government’s green-colored US Dollar Federal Reserve Note has confidence is because the US government forces that confidence on you at the point of a gun. If you don’t believe that, try printing up your own money that says “one dollar” and see if you aren’t arrested at the point of a gun for counterfeiting, then tried in a court with armed guards watching over the courtroom, and then sent to prison where you will be guarded by people with guns. Confidence. Enforced. At. The. Point. Of. A. Gun.
Across the globe, people of the world are telling us everyday there is no longer confidence in the US dollar, or in any other paper money. The evidence for that is (1) our enemies are working very hard to replace the world dominance of the US currency with their own currencies and they are doing a pretty good job of it, and (2) the rising price of gold/silver say so, as people across the globe trade their paper money for gold/silver. The rising price of gold/silver says very clearly that people would rather have gold/silver than paper money. The rising price says, as time goes by, those people are willing to give even more dollars for the same amount of gold/silver. Gold and silver values are a report-card on the health of the dollar, and right now the dollar gets a big, fat “F” in crimson red ink.
In America, folks haven’t caught on yet. But in Asia and in the Middle East they have caught on. Asians are gobbling up gold and silver like mad. They are devouring and hoarding and storing away all the gold and silver they can get their hands on. And what are they trading for that gold and silver? What are they using to pay for that gold and silver? They are using the US Dollars that we paid them for the cheap crap they sold to us over the past 20-30 years. They are converting those dollars we gave them for their cheap junk into gold and silver, and they are converting those dollars by the ton. Day after day, year after year, the Asians are slurping up all the gold and silver they can find and paying for those precious metals with US Dollars. They are also buying up gold fields, and shipping ports, and oil wells, and timber land and farm land and real estate across the globe, and they are using US Dollars to pay. They would rather have real stuff than the dollars, and they will keep spending those dollars on real stuff as fast and as long as they can.
The same goes for the Middle East. What did we give them dollars for? Oil. They are taking the dollars we gave them for oil and trading those dollars in for gold and silver. And for shipping ports, and farmland, and gold mines and real estate and anything else they can find that makes more sense to them than holding paper dollars.
Meanwhile, in the USA, most folks are clueless that the currency is failing and failing very quickly. The reason the rest of the world gets it and the US doesn’t get it is simple. All other nations of the world have had thousands of years of failed governments and changed borders, then brand new governments with new flags and new currencies and new rulers to salute. And these changes have happened to them every couple of centuries or even every couple of decades, and they know from their own histories that there is only one currency which has endured throughout all that social turmoil. Only one currency has their confidence. That currency is gold and silver.
Meanwhile, in the USA, the richest nation in the history of the world, we have lived as fat, dumb and happy for so long that we believe we are immune from the blood soaked lessons of historic upheaval within our own nation. The explanation for why we don’t get it is really that simple.
When one fellow wants to buy and one fellow wants to sell, that’s called a free market. It doesn’t matter if the two fellows like each other or not. It doesn’t matter if one fellow is a “free democracy” and the other is a “communist dictatorship.” They still trade with each other, don’t they?
What does matter is whether one fellow, or nation, trusts the others money. Confidence. Both sides of the trade need to have confidence in the others money, or form of payment. They ask each other questions, like: Is the oil that I just spent years exploring for, and then more years drilling to bring up out of the ground, and then weeks moving around the globe in tankers, oil which is necessary and vital to run the engines of commerce, oil that heats homes and runs factories and is turned into gasoline for cars and used in thousands of products that customers around the world want to buy — is that oil of mine worth the paper money you printed this morning? Questions like that.
The global markets are now linked in a global free market economy. It’s a free market because if I don’t want to buy your stuff, or sell you stuff, I don’t have to. There are plenty of others I can trade with.
The free market remedy for worthless money — a failing paper currency — is collapse. Collapse means no one will take that paper as payment because it no longer holds confidence. And collapse means the government is no longer able to force that confidence onto its own people. When a currency collapses, the collapse of government – and many aspects of society – are right behind.
That collapse is coming, whether you want to believe that or not. When that collapse comes, whether it is next week or 10 years from now, people storing their wealth in paper money will be ruined and will be left in poverty, while people holding gold/silver will have saved whatever wealth they have put into that gold/silver. History has repeated that scenario many, many, many times over and over and will again. And that happens because governments destroy their own currencies by printing too much of it, as we reported the US government has done, is doing and will continue to do, in a recent post linked here.
Governments always have, they always do, and they always will ultimately destroy their currencies. That’s what all governments throughout history have always done with their paper money and that’s what governments always will do.
I’m not saying the USA will disappear. Your government is not your country. And your currency is not your country. I’m saying everything about life in the USA is going to be something you never dreamed could happen. I’m saying those changes are coming sooner than you think, and I’m saying you are not going to be happy with those changes. I’m saying the USA is bankrupt by every commonly understood definition of the word. I’m saying that the evidence of history - the evidence staring you in the face of government’s criminal handling of the economy added to government’s massive, wasteful, thoughtless spending for the past several decades – the evidence that the debts this nation owes can only be paid if this nation continues to print money by the trillions for the next many decades – the evidence that we previewed in 2008 which revealed massive government dishonesty and trillions in debts we didn’t even know about, debts and sweetheart deals and outright criminal theft that was all kept secret from us - the evidence that your own government admits the dollar is worthless by the price it charges for dollars through the Federal Reserve’s interest rates (next to zero and not expected to rise until 2015 according to the Fed itself) – the evidence sitting right there in front of you that nothing is going to change anytime soon – all that evidence says that I am, unfortunately, on the mark.
And I’m saying all that evidence put together says the USA is not immune from the lessons of history whether you want to believe that or not.
Maybe you do believe it. Let’s find out. Here’s a common-sense exercise you can work out for yourself. Let’s say you love your children and you’d like to do whatever you can for them. Let’s say you have some wealth that you’d like to leave to your children as an inheritance. Let’s say that wealth equals one thousand of today’s US dollars. Let’s say you have a place to put that one thousand dollars, and it’s a place your children will have access to 20 or 30 years from now. And let’s say you really want to be sure your children receive that wealth when the time comes.
Are you going to put that one thousand dollars away for them (a) in the form of gold and silver valued today at $1000, or (b) in the form of $1000 in US Federal Reserve Notes, or (c) are you going to write them a check? Which form do you suppose in 20 or 30 years will be guaranteed by the free market across the globe to be worth the equivalent of today’s $1000, with no questions asked?