Gold and Silver
Gold and silver have always been ‘sound money’ for a flourishing nation. This is why we also use the colours of gold and silver for our coins’ colours today.
When a currency is not tied to something with intrinsic value, like precious metals, there is a 100% chance that the currency will destroy itself. Not once in the history of humanity has a fiat currency stood the test of time.
We can also see, like clockwork, an emerging pattern – shown below.
The 7 stages of empire
- Sound Money – Gold or Silver or backed by gold and silver.
- Public Works and Welfare – Takes on more economic burden adding layer upon layer of public works (buildings, infrastructure, welfare etc)
- Expanding Military – Begin funding massive military
- War – Uses military and expenditure explodes
- Currency Debasement – Steals wealth of the people by debasing the currency. We now call that ‘printing money’, but they used to remove the gold/silver content from coins and fill it with copper instead – Unlimited quantities = decreasing value.
- Loss Of Faith – Loss of purchasing power is sensed by population as prices keep increasing.
- Currency Crisis – Mass movement out of currency takes place and value of gold and silver increases as they account for huge quantity of currency that was created.
Like a pendulum with stages, it swings from quality money (gold) to quantity currency (fiat). When Nixon took the US dollar off the gold standard in 1971, this was the beginning of its fall from ‘sound money’.
I should also mention Bitcoin here – we’ve never had the technology to create something such as Bitcoin, labelled ‘digital gold’. Every 40 years or so, there is a significant change in the way the financial world operates. 1971 was the event before this one, the creation of digital money. Is it here to stay? History says it will. Could it become the reserve currency of the world?… very possible.
Gold And Silver As A Hedge
I suppose at this point I have to say ‘this isn’t financial advice’ 😴. (ironic that the people who say we have to say that are government workers who are reliant on fiat money for their income)
History repeatedly repeats – make no mistake – fiat currency’s demise is coming, and very quickly. We revert to history to see that gold and silver are always left standing in their glory when fiat comes crashing down.
See the price of gold against the German Papiermark in 1918-1923.
And here it the graph for the US dollar since the ‘founding’ of America
With the amount of currency going into the fiat systems right now, there is a severe chance of this worldwide. Gold and silver will be a haven for the educated. And digital gold (bitcoin) could be a haven for the younger generation who understand technology.