Most people can’t get a grip that the dollar is losing its buying power every year. It makes sense to take the projected future worth of money as equal as it is today. But that’s not the case with rising inflation rates and the possibility of hyperinflation occurring in the United States in the next decade.
The truth of the matter is that the Federal Reserve has been printing more dollars than can be justified. This creates an artificial bubble that no one can see, and no one knows when it’s going to pop. On the other hand, hard money like gold is much better at maintaining value over time and increasing it too. Follow this link to read more.
It’s one of the things that incentivize society to save more and invest in it. If you know that your money is going to be worth more in the future, then it makes sense for that future to come before you spend it. On the other hand, the dollar at the moment is an inflationary asset.
It makes much more sense to take on a lot of debt now since the projected worth will decrease into the future. Even if you’ve figured this out, the central banks have nailed it down by introducing high interest rates when you have to give it back. In every scenario that you pick that’s connected to the dollar, you’re the one who’s losing, and the government is always winning. So what can you do?
Finding the right assets
Even though the odds are stacked against you, and the incentive to save is reduced, there’s still hope. The hope can be found in hard money assets such as gold and Bitcoin. These two choices are completely deflationary, and they can’t be created out of thin air, especially gold. Visit this page for more info
In order to find gold, someone needs to dig into the Earth, mine it, and then bring it back up to the surface. Bitcoin is a complete imitation of the proof of work mechanism in the virtual world. However, in the event of a solar burst, the internet will stop working, and the assets in cryptocurrencies will not be available to use, meaning that society will come to a halt because trade would be impossible.
For that reason, the only option is gold. No one can make more of it since there is a finite supply. Using gold will make everyone strive to obtain more of it. This means that capital will start increasing, and people will become more productive.
Instead of playing video games, kids will start looking for ways in which they can get their hands on more gold. Since the amount of precious metals is completely fixed, the value will keep going up into the future. Everyone will postpone immediate gratification, and they’ll buy the necessities they need.
That’s the ideal world that capitalism strives to achieve. Additionally, the prices of specific services and goods will keep decreasing. This means that as time goes by, you could buy more things with the same amount of gold. In the end, your future self will be wealthier just by holding to a single asset.
All spiritual, cultural, and societal pursuits will be directed to making progress since immediate rewards will be shunned. More savings always equal more progress with no possible limit. That’s exactly what happened during the industrial revolution. At that time, all currencies were directly connected to gold.
In order to issue out a single dollar, the Federal Reserve needed to have an ounce of the yellow metal in a safe. Instead of having a debt crisis, there will be a savings paradise. More people will have resources, and the living standards will be improved.
Our society was on the right track for two centuries, but that all changed in 1971 when Nixon decided to abandon the gold standard. This made money soft and in the control of a small number of people who can create wealth with no consequences for them and at the consequences of everyone else.
Why should you invest in it?
At Valcambi, gold is not the only precious metal to invest in. Immediately after the first World War, Germany was in a tough spot. All neighboring countries didn’t want to trade with them and devalued their currency. The only thing left for them to do was to go back to using precious metals for trading.
Whenever hyperinflation happens, this is the only way out. At that time, a single ounce of gold could buy an entire house, and a single ounce of silver could buy a car. Those trades might become a reality in the following years with the rate of inflation.
Russian economists have calculated their rates, and they stand at 6.5 percent. The United States issued out stimulus checks and experienced a rate of 5 percent in a single month. Those numbers are not looking good for the global economy.
Whenever currencies get devalued, precious metals go up. For that reason, it’s important to allocate a part of your portfolio. Even putting ten percent of your net worth into gold could be worth more than the other 90 percent in the case of hyperinflation when stocks, bonds, and shares will be devalued.
Depending on how much you can afford, you can start from a single ounce and go up to complete bullion. However, make sure you keep it in a safe place where it can’t be accessed easily.