Money Versus Currency

Did you know that the dollar has lost 98% of its value since 1913? Did you know that the dollar and other currencies used to be backed by gold, and now are only backed by government decree? (i.e., it is worth something because the government says that it is worth something! Does this mean then that it really has any value?). This drop in value of the dollar and other currencies is due to inflation, which is basically money printing by the government (both democrat and republican). How do you protect against inflation? Well there are several approaches , including investing in the stock market, investing in real estate and investing in commodities.

Ideally, you want to invest in all of these to be more diversified, and if you can do even more, such as getting farmland, and oil well or silver mine even better! The latter may not be so easy for most of us however, but I still like to invest in commodities, as a trader and as an investor. One of the best commodities to invest in is physical gold and silver, as they are easy to store, and can be readily traded (it’s not so easy to store and exchange barrels of oil, orange juice, etc). If you want to learn more about what is money and what is currency, why you need to have physical gold and silver and not just paper versions such as a gold ETF, and how to buy and store these precious metals (DO NOT keep these in your home!) one of the best ways to learn is to watch the youtube videos by Mike Maloney of GoldSilver.com. These videos explain the history of money and also the situation of today, and why you need to have some percentage of your savings and investments in gold and silver (typical recommendations are in the 10% range). The link to the video series from whygoldsilver youtube channel is here, and I cannot recommend it highly enough. Also, here is the trailer for his series:

For me, owning precious metals is a defensive play, I like to be mainly offensive to try and get significant gains on my investments. However, I know I am swimming upstream in terms of fighting inflation and that the average life expectancy for a fiat currency (a currency backed by government decree, rather than gold and silver) is 40 years. The last major global currency shock was in the early 70s, so another one is due (you could argue that was 2008, but do you believe things are back to normal right now?) and so it is wise to be diligent, and have some of your investments in these physical precious metals commodities.