‘GOLD IS THE MONEY OF KINGS, SILVER IS THE MONEY OF GENTLEMEN, BARTER IS THE MONEY OF PEASANTS – BUT DEBT IS THE MONEY OF SLAVES.’ – Norm Franz
To be called money a monetary instrument needs to satisfy a couple of requirements.
First, it has to function as a medium of exchange. This means people will readily accept it as payment for goods and services. Governments can help bolster the case for their respective currencies. The IRS for instance will only accept US Federal Reserve Notes (that’s the actual name of the dollar) as a tax payment.
Second, it must be a unit of account. There was a time when tobacco and other crops backed money. However, variables like weather and a bad growing season change crop yields and alter supply. The value of something called money needs to be predictable.
Third, it must be a store of value. Here is where we have a problem. To be money a currency needs to give workers the ability to save it confidently. That saving turns into capital fuelling investment and growth. The quantity and integrity of the currencies today is in question. When trillions of dollars appear at the click of a button, there is no incentive to build savings.
In other words, the real money must be fungible (one unit should be interchangeable with another), durable (an item must be able to withstand being used repeatedly), divisible (can be divided into smaller units of value), portable (individuals could carry money with them and transfer it to others), acceptable (everyone must be able to use the money for transactions), a peculiar uniform (all versions of the same denomination must have the same purchasing power) and most importantly it should be limited in supply (the supply of money in circulation ensures value remain relatively constant).
Please keep in mind that gold and silver function as well as money because they are hard to create. Their supply grows slowly. The governments and the central banks don’t like that. Savers do.
The US Federal Reserve and all the other central banks around the world publish plenty of papers and interviews with representatives talking about money. You can even visit the St. Louis branch of the Fed to see a cube of $1 million worth of $1 dollar bills, an amount which was once a real fortune.
Inside the St. Louis branch of the Fed. $ 1 million is not worth as much as back in the day.
Of course, the government officials and the central bankers don’t really care. For them, the debt doesn’t matter. A government doesn’t function the way a small business does. When it comes to money and debt the system is more complex. It has different variables.
Of course, that doesn’t mean endless spending is free of consequence. Eventually, the numbers get too big. The debt load can crush the economic engine supporting it. Again, we are not worried about the government going bankrupt. Governments have the power to tax, incentivize and compel behaviour. What worries us today is protecting our hard-earned wealth from the government’s next move.
Wealth isn’t something only billionaires need to consider. It’s what’s leftover when you spend less than you earn. It is capital. It is the tangible result of hard work and sacrifice. Today that wealth is in serious trouble. The precious metals are the antidote.
Silver and gold are wealth insurance. They can’t be produced in unlimited quantity like the government currencies. However, most people aren’t interested in wealth insurance today. They’re caught up in the day-to-day noise that clutters a non-thinking mind. They miss the big picture. They miss the warning signs.
It is a lot like hurricane insurance. Nobody wants to buy it before the storm. After the storm levels, a community everyone wants it and insurance companies don’t want to sell it. The irony is that after the storm passes there probably won’t be another one in years to come. Worse yet, hurricane insurance rates jump after the storm. A wise man buys insurance before the storm when it is cheap.
Wealth insurance is really cheap today. Meanwhile, the threats to wealth have never been greater. Just like a community where no one remembers the last storm doesn’t see the point in storm insurance a little people want precious metals today. Soon that will change.
Once wealth is visibly in serious trouble, obvious trouble, we will see a surge in demand for silver and gold. It will be too late to get positioned once that happens. This is how markets work. They lull you into submission. People tell you there hasn’t been a storm for years. What’s the use in having that insurance? Stop paying it. Better yet, spend the money and enjoy yourself.
This is where it is important to understand the big picture, the market cycles. They ebb and flow over longer periods of time. When you look closely it is obvious. Most people think it is too complicated. The truth is, they are unwilling to look at all. What’s truly complicated is losing a chunk of your wealth every 8-10 years in a market crisis. The average person is a defenceless sheep when these strikes. It doesn’t have to be that way.
Think back to the dot-com boom, the housing bust, and the late stages of today’s stock market rally. Each one of these slowly sucked in everyone watching. First the smart money, then astute investors, then the surging masses. Finally, even the naysayers. This is how a big market trend works. It eventually wears out even the loudest sceptics. It draws in doubters. One by one it takes in everyone. When there is no one left it changes direction – usually turning on a dime, wiping out wealth almost overnight.
Right now strong hands hold silver and gold. That means silver and gold sit in the vaults, bank boxes, home safes, and private bank accounts of very sound thinkers. They don’t speculate. They hold their precious metals as wealth insurance. They see what’s ahead for the fragile money system. There’s never been a more important time to own its purest antidote. Be smart; buy your wealth insurance today.
Nowadays is not the first time the stock market hit all-time highs.
While the author has made every effort to provide accurate data and information in the preparation of this article, neither europabullion.com nor the author assumes any responsibility for errors or for changes that occur after the publication. The information referenced is believed to be reliable, accurate, and appropriate, but is not guaranteed in any way. The strategies and forecasts herein are the author’s sole opinion and could prove to be inaccurate. No company, individual, or entity compensated the author or europabullion.com for mention in this article.
The article contains specific names of companies, strategies, different currencies, shares, government bonds, types, and sizes of precious metals, none of which can be deemed recommendations to the readers. Reading this article does not constitute a fiduciary relationship. Data, company-specific or otherwise, will not be updated on an ongoing basis. After the publication of the resources, the author and europabullion.com will not be responsible for future developments.
A registered financial advisor is always the best source of guidance in making financial decisions. The author is not a registered financial advisor and does not address the individual financial condition of the reader.